The "secret sister gift exchange" invites participants to purchase a gift valued at $10 for a stranger and claims that the participant will then receive as many as 36 gifts from strangers. It also encourages people to invite friends to join.
"Of course, starting this gift exchange comes with a catch," the BBB said in a statement, "you need to disclose your personal information, such as your home address."
The BBB called this a "typical pyramid scheme," adding that it has been able to gain a lot of traction on social media during this season of goodwill. The BBB also said that gift chains like this not only are scams but also are illegal and that those who participate could be subject to penalties for mail fraud.
The agency recommended that consumers check with it before becoming involved in suspicious activity.
"To avoid this scam, the best thing to do is completely ignore it altogether," the BBB said. "Do not give personal information to anyone."
Many local authorities have also issued warnings not to fall for this scheme. Some, such as the Cookeville Police Department in Tennessee, shared warnings on social media, where many people will see invitations for the holiday scam. "Don't fall for the post popping up on your news feed about a secret sister gift exchange – it's a scam and illegal," the department wrote.