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Social media gift exchanges costing consumers more than a present

Day 5: 12 Scams of Christmas
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Posted at 6:01 AM, Dec 11, 2020
and last updated 2020-12-11 10:07:32-05

BALTIMORE — Secret Santa or secret sister gift exchanges on social media seem harmless, but these games cost more than you think.

The posts ask participants to mail one gift or a bottle of wine to another participant, and in exchange, receive multiple gifts.

Angie Barnett, president and CEO of the Better Business Bureau serving greater Maryland said you likely won’t receive anything and you’re giving away your personal information.

These pyramid schemes, however, can become costly when more money is involved. These include the Blessing Loom or Cash App Circle.

“People were receiving notifications that all they had to do was invest $500 to get $5,000,” Barnett said.

Participants would load up prepaid cards then wait for their investment to grow.

“Money is to be made by those at the top and the further out the circle goes, when I bring in friends to invest and then they bring in friends, the money dries up. There’s not enough money to support that large group and the pyramid literally collapses,” Barnett said.

Barnett added that these online scams became more prevalent right as the pandemic hit.

People were losing money at a time when they could not afford to do so,” said Barnett.

In addition to being a poor investment, these schemes are illegal. The U.S. Postal Inspection Services considers it a form of gambling. It’s also illegal to mail alcohol via USPS.

So when you receive one of these invitations, just ignore it or report it on the social media platform.