Beware of Secret Santa Chain Letters and Other Holiday Pyramid Scams

Every December, a group of long time friends living in the San Fernando Valley circulate a “Secret Santa” chain letter on their Facebook pages inviting other women they know to participate.  

The letter instructs them to add their name and address to the list of names and they will receive gifts mailed to them. If they send a gift to the person at the top of the list, their name will move up the ladder and they will receive gifts too. 

Participants are instructed to spend no more than $25.

“It’s been fun and seemed pretty harmless,” said Cynthia, a Northridge resident who asked that her last name not be included. “I’ve received a few scarves, some costume jewelry and other small gifts — some I’ve liked and kept, and some of the items, I’ve re-gifted to others.

“I didn’t receive a ton of gifts, but it was fun to go  to my mailbox and see a few packages ” she said.  

But now, after learning that what she perceived was harmless is in fact very risky, Cynthia said she won’t be adding her name to chain-letter lists anymore.  

Beware of Secret Santa Chain Letters and Other Holiday Pyramid Scams
Beware of Secret Santa Chain Letters and Other Holiday Pyramid Scams

“In our group, we were all family members — friends or friends of friends so I felt comfortable,” she said.

“I’ve heard of cases where some people never got a gift, but that wasn’t the experience in our group. Because of the pandemic, we probably wouldn’t have done it this year anyway, because you don’t know if the person mailing it to you is carrying COVID.”

Authorities, including the Better Business Bureau, warn that whether you are solicited to participate in chains like this online or via regular mail — it is illegal. Chain letters that involve money or gifts are considered a form of gambling.  

 Beyond “gifting,” many of these chain letters instruct you to send money, as little as $5, to the person at the top of the list with promises that as the letter circulates to more people, you will receive a lot of money when your name gets to the top of the list.

After you send your money to the person at the top of the list, you are instructed to cross that name off of the list, moving the next person to the top of the list. Some chain letters claim that participants can make thousands of dollars from just sending $5 dollars which never occurs. 

Los Angeles City Attorney Mike Feuer has issued a warning for residents to be aware of all holiday scams. In addition to chain letters, there is a “Santa Claus ruse” that circulates year after year.

“It starts with an email — an unsolicited email — offering to sell you a handwritten letter from Santa to your child, usually with a signing price of $19.99,” Feuer said.

“Don’t click on the link, as it takes you to a website promising to sell you a customized letter from Santa. In the best case, you’re simply out twenty dollars; in the worst case, you just shared your credit card information with potential scammers who could now use it for identity theft.”

Feuer also warned against the gift giving solicitations — whether via social media or email — that are often scams.  

He said people are enticed by a “convincing invitation.” People are invited to sign up for what may seem like fun, but is actually, mischievous.

When people provide a name, address and other personal information, and then tag a few of their friends for the gift exchange, that information is added to a scammer’s grocery list of strangers on the Internet.

“Next, it’s your turn to send an email or social media invitation, but to send a modest gift or a bottle of wine to a stranger, along with their family, friends and contacts, and the cycle continues,” Feuer said. “You’re left buying and shipping gifts to unknown individuals in hopes that the favor is going to be reciprocated and that you’ll receive the promised number of gifts in return. Unfortunately, it doesn’t happen that way.

“Just like any other pyramid scheme, it relies on the recruitment of individuals to keep the scam afloat. Once people stop participating in the gift exchange, the gift supply stops as well and leaves hundreds of disappointed people without their promised gifts.”

People can report suspected scams online at

City News Service contributed to this article.


If you receive a chain letter by mail, email or social media, especially one that involves money or gifts, the Better Business Bureau recommends:

• Start With Trust®. Check with BBB before becoming involved in suspicious and possibly illegal activity.

•To avoid this scam, the best thing to do is completely ignore it altogether. Do not give out personal information to anyone.

•Chain letters via social media and U.S. mail that involve money or valuable items and promise big returns are illegal. If you start a chain letter or send one, you are breaking the law.

• Chances are you will receive little or no money back on your “investment.” Despite the claims, a chain letter will never make you rich.

• Some chain letters try to win your confidence by claiming they’re legal and endorsed by the government.

• In addition to the Better Business Bureau, you can report suspected scams online at www.lacityattorneyorg/consumers.