Steer Clear of Social Media Gift Exchanges

Who doesn’t like a “Secret Santa” gift exchange? All of you Scrooges out there might not enjoy this holiday tradition. But plenty of people find it fun. That’s why invitations on social media to participate in gift exchanges—even with strangers—can be so enticing. 

Watch out, though. What might seem like a way to spread holiday cheer actually is a scam. In fact, these social media gift exchanges can be pyramid schemes, which are illegal. 

To avoid getting caught up in a gift exchange gone bad, here’s what to know about these scams that typically pop up around the holidays.

How social media gift exchange scams work

These scams start with a direct message on social media platforms or in an email inviting you to join a fun gift exchange, according to the Better Business Bureau. These gift exchanges have a variety of names, such as “Secret Sister” and “Secret Santa Dog.” 

To participate, you must add your name, address, and the names and addresses of a few friends to a list. You’re told that you have to send a gift to someone on the list—a bottle of wine, gifts valued at $10 or even cash. In return, you’ll receive several gifts.

With these scams, though, you rarely receive any gifts. Yet, you’ve thrown away money on a gift for a stranger and given away your personal information, which could expose you to other scams or identity theft, according to BBB. 

Also, because these gift exchanges relying on recruiting others to participate, they can be considered pyramid schemes. According to the U.S. Postal Inspection Service, it’s against the law to promote or participate in a pyramid scheme.

How to avoid gift exchange scams 

If someone sends you an email or message through a social media site inviting you to participate in a gift exchange, follow these tips from BBB.

• Ignore gift exchange invitations. Even if you know the person inviting you, you shouldn’t participate if you’re being asked to recruit others into the gift exchange. This is considered a pyramid scheme, which is illegal.
• Don’t share your personal information with strangers. Beware of any request to share personal or account information. Thieves can use this information to steal your identity.
• Don’t fall for false claims. Scammers might try to win your confidence by telling you that the exchange you’re being asked to participate in is legal, will make you rich or is even endorsed by the government. But don’t believe these lies. You won’t get lots of cash or gifts by participating.
• Report suspicious social media posts. If you see someone promoting a gift exchange on Facebook or Instagram, click the three dots in the top right corner of the post for the option to report the post. 

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What to do if you participate in a gift exchange scam

If you share any personal or account information as part of a gift exchange, take steps to protect your identity and your finances. Place a security freeze on your credit reports at each of the three credit bureaus—Equifax, Experian and TransUnion—to prevent fraudulent accounts from being opened in your name. 

Monitor your bank and credit card accounts for unauthorized charges. Signing up for a service such as Carefull can provide 24/7 monitoring of your bank and credit card accounts for unusual or fraudulent transactions, as well as credit and identity monitoring. Plus, you get up to $1 million in identity theft insurance coverage. You can try Carefull for free for 30 days.‍

[ Keep Reading: The Top Holiday Scams of 2023 ]