The Better Business Bureau (BBB) saw an increase last year in people getting Facebook gift exchanges that made big promises but failed to deliver.
In particular was the Facebook Wine Exchange – send someone a bottle of wine and miraculously you’ll receive 36 bottles in return.
Gift exchanges on Facebook have been hanging around in various forms since 2015 and they all have the same feel – that’s because they are simple pyramid schemes.
Sending one bottle of wine seems harmless enough. However, operating and taking part in a pyramid scheme is illegal in Canada and while you might not get arrested for sending a bottle of wine, you could face penalties or fines.
“Fortunately, we haven’t seen the wine version of the Facebook Gift Exchange show its head much this holiday season,” says Evan Kelly, senior communications advisor for BBB serving Mainland BC.
“But that doesn’t mean it’s not out there or offering some other exchange where users are led to believe you can get multiples in return for one input. Like any pyramid scheme, the person who starts it gets all the booty and the rest lose out.”
Whether you are giving wine or cash, pyramid schemes have one common factor – they are driven by recruitment, which means in order to get those 36 bottles of wine, you need to bring in that many people.
BBB offers these tips to avoid a pyramid scheme:
* Be wary of “opportunities” to invest in things where the success or failure relies on subsequent recruitment.
* Independently verify the legitimacy of any franchise or investment before you invest.
* If it seems too good to be true, it is.
* Be wary of promises of low risk and high returns in a short amount of time.
* If no product or service is being offered or sold, how does it make money?
* Invest your money with reputable investment professionals and firms with a track record.
* Be very wary of investments that promise low risk and high returns.