Beware the 'Secret Sister' scam this holiday season

Have you seen those social media posts going around about the “Secret Sister” gift exchange? Don't fall for it. It seems like an easy, fun way to send and receive presents with strangers while spreading holiday cheer, but it's really a holiday scam that can end up costing you a lot of money. 

The scam works by having each person send one small gift to a "secret sister" while providing personal details to be shared with the larger group. You think you'll get showered with gifts in return but what actually happens is the scam organizers collect the gifts and personal information then disappear.

So save your time, money, and personal details this season—ignore those Secret Sister posts and spread goodwill another way. The holidays are meant for real friends and family, not strangers trying to take advantage of your generosity.

What is a "Secret Sister" gift exchange?

A "Secret Sister" gift exchange is a scam that circulates on social media during the holidays. It promises participants will receive up to 36 gifts in exchange for sending one gift. Sounds too good to be true? That's because it is.

The scam spreads through social media posts, emails, and messages. The organizer will claim they started it with a small group of friends the year before and it was so much fun that they decided to expand it. New participants are asked to invite more friends to join in. This tactic is meant to make the scam seem more believable and spread it to as many new people as possible.

These gift exchanges prey on people's generosity and desire to participate in fun holiday traditions. The scam works by asking you to share a post on social media to invite friends to join the exchange. You're told to send a gift worth $10 to a "secret sister" and provide your own name and address to receive gifts in return.

In reality, the organizers of these schemes have no intention of managing a legitimate gift exchange. They're just trying to get free stuff by manipulating kind-hearted people. The promised avalanche of gifts never comes.

Red flags to watch out for

When participating in a gift exchange, there are a few signs that point to it possibly being a “Secret Sister” scam. Watch out for these red flags:

You're asked to share personal information.

Legitimate gift exchanges won’t ask for sensitive data like your address, email, or credit card number. Scammers use this info for identity theft or to sell to other scammers.

You're promised extravagant gifts in exchange for a small gift.

If it sounds too good to be true, it probably is. There’s no way a $10 gift will get you an iPad or designer handbag in return.

You're asked to pay money upfront before receiving any gifts.

Legitimate gift exchanges are based on gifting physical items, not exchanging money. If you're asked to pay a participation fee, it's likely a scam.

Instructions seem disorganized or unofficial.

Watch out for poor spelling and grammar or handwritten notes. Legitimate companies will have professional-looking marketing materials.

You feel pressured to participate.

Real gift exchanges don’t pressure people into participating or make them feel obligated. You should never feel forced to give personal details or money to take part in a gift exchange.

What to do if you've been scammed

If you've already sent money or gifts to someone through a "Secret Sister" scam, don't feel bad. These schemes are designed to trick people. But now it's time to take action to limit the damage.

Contact your bank and file a fraud report immediately

Let your bank know you've been the victim of fraud and file a police report about the scam. Provide any details about the scammer that you have, including names, emails, mailing addresses, and phone numbers. Your bank may be able to stop payments or freeze your accounts to prevent further losses. They can also walk you through additional steps to secure your accounts.

Alert friends and family

Warn people in your social circles about the scam so they don't fall victim as well. Share details about how the scam worked and what to watch out for. The scammers often target friends and family of people they've already tricked, so spreading awareness can help break the chain.

Report the scam to government agencies

File a complaint with organizations like the Federal Trade Commission, US Postal Inspection Service, and Internet Crime Complaint Center. Provide details about your experience with the scam. The more reports these agencies receive, the better able they are to take action against the scammers.

Monitor accounts and credit report

Carefully check statements for all financial accounts to ensure no additional fraudulent charges or activity. Also, check your credit report for signs of identity theft. The scammers may have obtained more of your personal information to perpetrate other scams. Place a fraud alert or freeze your credit to be safe.

Don't feel embarrassed and share your story

The scammers are counting on victims to stay silent out of embarrassment or shame. Speak up about your experience to raise awareness and help prevent others from becoming victims. Share on social media, report to consumer advocacy groups and tell news organizations. Your story could be featured in reports warning others about current scam trends. The more people talk about these scams, the less effective they become.

This year, enjoy the holidays by exchanging gifts with people you actually know and trust instead of strangers on the internet. Stay vigilant, trust your instincts, and have a happy season!