Fraud: An Affiliate Epidemic

Fraud! What is it good for? Absolutely nothing. Say it again!

If you are running a pay-per-click or pay-per-lead affiliate program, there are people out there trying to rip you off. Fraud is widespread in affiliate marketing, and it comes in all shapes and sizes, from pimply 13-year-olds who repeatedly click a link on a cost-per-click (CPC) program to sophisticated crime rings.

But what is this fraud that the affiliates are committing on us, you ask? On the surface, it’s really any sort of deceit, trickery, or cheating performed to steal from an affiliate program.

The Faces of Fraud

The bottom feeders are kids who repeatedly click on CPC links or fill out registration forms. They can be difficult to detect because they often do not produce a lot of activity. On the other hand, they can be sloppy and tend not to cover their tracks well.

The midlevel cheaters utilize automated scripts and programs that simulate real, human activity. For instance, there are JavaScripts that can fake clicks or open windows. Then there are programs that cover all of the bases for affiliates that don’t even have a site. These programs simulate impressions and clicks, and are capable of setting up a desired click-through rate.

Top-dog fraud perpetrators are the most dangerous of all. These affiliates write programs that create a large number of cookie-cutter sites. The innocuous-looking sites often never generate any red flags because the affiliates are savvy. Rather than achieving ridiculously high conversion rates, these affiliates set up their programs to operate at a level that is just above the payment threshold.

To paraphrase ESPN’s Dan Patrick, you can’t stop them; you can only hope to contain them.

I Didn’t Want to Do It

Before I became an affiliate manager, I was an affiliate for a few years, so I was well aware of the arguments on whether a program should have automatic or manual approval.

I was steadfastly against manual approval. After all, when I’m in front of the computer, churning along at Internet time, I want to do things in the here and now. If a merchant wants to approve my site before I can put up links, I’m often driving traffic to their competition by the time they approve me.

That thinking was applied to the ClubMom program from the time I launched until a few weeks ago. I wanted every interested affiliate to be able to get my links up as soon as possible.

Then reality hit. From month to month, I found myself spending more time identifying and researching fraudulent sites. I was spending far too much of my time vetting out the unsavory sites (and a great deal of them were banner farms and other tragic wastes of the human spirit).

So I finally pulled the switch. Geez… affiliate managers wonder why they have so many inactive affiliates? It’s simple: Most of the monkeys that applied to their programs don’t know the difference between HTML and the AARP.

No More Teachers, No More Books

I was approving the vouchers for February 2001 affiliate commissions when I came across an affiliate that I did not recognize. As I investigated this affiliate’s account further, I determined (through my top-secret antifraud tactics) that I had a cheater on my hands.

My suspicions were confirmed when I went to the URL supplied by the affiliate. The page consisted of one of my 468 x 60 banners and the following copy, which outlines how this guy was committing hot-line server fraud against me:

    Click on the banner to get your access to my server!! You will get a username and password that gives you full access.

    Instructions:

    1) On the top-left, click the button to join the site. If the button does not appear, you need to click on the “ClubMom” icon on the top left, then sign out, and sign up again.

    2) On the final page, titled “Thanks for joining ClubMom!” the username and password are the first word on the last line. (All lower-case. It begins with an “e.”)

    NOTE: You do NOT have to verify your email address. You can type fake info if you like.

I followed my usual protocol of disabling the affiliate and sending a note about how I had determined that the affiliate had committed fraudulent activity and that the account was being closed. This is usually where it ends, but this affiliate decided to antagonize me with multiple messages.

It was then that I noticed that he had committed hot-line server fraud with his student account. This particular affiliate was attending a prestigious university in the Northeast, and I was pretty sure that committing fraud violated the student code of conduct.

To make a long story short, I received an email from the vice president for information technology at this university, updating me on the situation. He stated “The student will be meeting with our administrators later today. As of Sunday evening the student was contacted, his student account was disabled, and his residential networking port has been deactivated for a year. Not just the rest of this school year, but until this time in 2002.”

The school administration is currently deliberating whether this student will be suspended. He fought the law, and the law won.

You see, it is possible to win the battle against affiliate fraud. And my next article will show how you too can take a proactive stance against fraudulent affiliates.

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