Lancashire trading standards warn against 'pyramid scheme' scams on rise

Online scams, including the 'secret sister gift exchange' are taking social media site Facebook by storm and scamming people in the lead up to Christmas.
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And although Lancashire trading standards haven't had any complaints of pyramid scheme scams in the county, they are urging people to be cautious about paying any money out online as the scams remain on the rise.

The 'Secret Sister Gift Exchange', promising participants 36 gifts in exchange for one investment, is spreading across social media site Facebook.

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The idea of the exchange encourages Facebook users to sign up to a secret Santa-style gift swap with strangers, where they can send a low-value gift to a person whose name and address is at the top of a list of participants.

'Secret Santa' scams are on the rise on social media site Facebook'Secret Santa' scams are on the rise on social media site Facebook
'Secret Santa' scams are on the rise on social media site Facebook

Once they've sent the gift, the person in the first place is removed and replaced with the person in second place.

They then add their own name to second place and are told to send the list to six other people.

More people receive the list as the invites spread, meaning each participant gets up to 36 gifts as more join the exchange.

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However, it operates like a traditional pyramid scheme, promising a huge return from just one single investment.

Lancashire Trading Standards are warning social media users about the dangers of pyramid-scheme scamsLancashire Trading Standards are warning social media users about the dangers of pyramid-scheme scams
Lancashire Trading Standards are warning social media users about the dangers of pyramid-scheme scams

Although mathematically impossible, they operate against Facebook's terms of use and are illegal in the UK.

Dawn Robinson, principal officer for Lancashire Trading Standards, said: "People still need to be cautious when paying money out.

"Pyramid schemes involve people getting a reward or compensation for encouraging more people to join them. They usually involve people losing out on what was promised, and any money they have put in.

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"These schemes are illegal, so please report anything which looks suspicious to us, so that we can look into it, and help other people to avoid getting drawn in.

"It's wonderful to be able to give someone a gift, especially this year, but please be careful so that you don't get caught out."

The scheme is dressed up to appear festive in the run-up to Christmas, but operates like a scam and should be avoided.

Starting with six people, who all invite a further six, they send gifts to the person in the top spot before they're moved off the list.

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Through being shared on a growing number of Facebook groups, the number of people involved grows to more than would ever take part - if the 36 each invite six people, the total number reaches 216.

And if all of those people do it, the number increases further to 1,296. By only the tenth stage, over 60 million people are involved.

According to Action Fraud, in the past 12 months, people in the UK have lost almost £35million to 'easy' pyramid scheme investments that are run by criminal networks.

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