A new scam is doing the rounds, just in time for Christmas parties and holiday entertaining.
The “Holiday Wine Exchange”, which is being widely circulated on social media, comes as a form message, saying that no matter where people live, they can take part in a “secret” wine bottle exchange. The sender requests a minimum of six participants, and promises that the recipient need only purchase one bottle of wine worth $15 or more, which is sent to one secret wine lover. The sender is told he or she will receive from six to 36 bottles of wine in return, depending on how many people join the exchange.
It sounds too good to be true; and it is, says Evan Kelly, senior communications advisor for the Better Business Bureau (BBB) serving Mainland BC. “It’s definitely a pyramid scheme, which under Canadian law is illegal.”
Kelly notes that while the impact on an individual person’s pocket is not significant, most people taking part will not receive any wine. “The people at the top will get a lot of wine, the people at the bottom will not.” He also points to a major issue with this particular scam: “How do you know someone underage isn’t taking part?”
Pyramid schemes vary in their “pitch”, but they all operate on the same principle: recruiting more and more people. A small handful of people at the top will reap rewards, but as the number of people needed to sustain the scheme increases, the chance of seeing any kind of return decreases. Eventually the scheme collapses in on itself, leaving the majority of people out of pocket.
Tips for spotting a pyramid scheme include no actual product or service being sold; it depends only on recruiting more people to produce results; it promises low risk but high returns; and it seems too good to be true. The nature of the recruiting process—friends getting other friends involved—can also have negative and lasting effects on friendships.
If you suspect something might be a pyramid scheme, independently verify the legitimacy of any franchise or investment before you invest. Investigate, ask around, search online, and be sceptical. Visit the BBB’s website at www.bbb.org/mbc for information about various scams that are in circulation.
“It’s the first time I’ve seen this scam,” says Kelly of the “wine exchange”, “but we’re seeing it a lot. It’s always the same post.
“You don’t buy one bottle of wine and get 36 for free.”