Fighting Affiliate Fraud - Put Your Detective Hat On

[Mushroom]

Julie,

I really echo your comments in regards to the importance of..

QUOTE]The most common case of fraudulent applications that we see are when affiliates try to claim another site as their own - a quick phone call to the website in question can clear this up very quickly.[/QUOTE]

A few of my sites have been abused this way, and the offenders, in my case were offshore. China to be specfic.

The method they used was to make application through a affiliate network and use the information about my site they obtained through a "Who is" lookup of the domain name. The section they filled out for sending the check was also mine, this all make it looks legimate to the affilate manager. They would let this sit for a few months after getting approval from different affilate managers within the affilate network. Then, say within a few months, they would change the address of where the check were to be mailed. The change of address would go undetected by the affiliate managers. They would then enter into boogus sites (charge stolen credit cards for merchant purchases), SPAM mail.

You may ask what about the email address of the domain, which is often used to varify the domain. They would use a name that we would not recognize on our end and it would just appear as SPAM, and be ignored. Like SPOOF.

Julie the best way to fight this problem is through awareness. I tired to go through the affiliate network and they would only say it was the affiliate managers responsibility to verify, not the network. Agencies like the Federal Trade, Attorney General's Office, FBI are helpless to deal with these matters from offshore.

Kind Regards

[Rob_TID]

Yup, saw that happen a few times.

The way to overcome that is to check the geographical IP of the application at the beginning.

If Fred Smith from Iowa is applying from Xinjiang, it was usually safe to delete his application straight away.

[Linda Buquet]

Yep there's a huge very organized Chinese fraud ring, they stole my identity too.
Applied to TONs of networks and programs pretending to be me. Same MO as Mushroom said. Luckily some networks that do phone verification called to see if I was really me so I was able to figure it out. But could not stop it. Some merchants that don't know me thought I was the one doing the actual fraud. It was a mess for months.

In my case even when they changed the pay to address it was not even obvious because they were so smart they had PO boxes that sounded like real addresses all over the country. They set one up right in OC where I lived, so it would not raise much suspicion with AM's, they'd think I just moved down the street. I got that local mail house to collect and keep all their mail for a month and send me copies of all the envelopes. Those guys had TONS of checks from tons of networks made out to a bunch of different peoples names. TONS! We tried to get the FBI involved. I could not even get to anyone that knew enough about the Internet to understand the situation and how big this was. That was only one mail house. They had mail houses all over the country forwarding checks to them in China.

What I don't get though is how they could cash all those US checks in a Chinese bank, made out to a bunch of US names and some even made out to US company names?

[Linda Buquet]

Oh and they did it to Shawn Collins and other big names I know too.

I think networks should set up a flag for change of address and call to verify when it happens. Legitimate people don't move all that often that it would put that much strain on the staff. They could probably save a ton of money by catching these guys before they start sending out checks.

[Edwin]

Originally Posted by Linda Buquet

What I don't get though is how they could cash all those US checks in a Chinese bank, made out to a bunch of US names and some even made out to US company names?

Maybe they started their own bank
With the huge amount of checks you saw that where coming in they may have created a financial network of their own or use a insider at the bank to cash the checks? either willingly or forced?

[Mushroom]

Linda,

They had a US Bank that the funds would be sent to.

Ideas, like the ones expressed here, are good ways to help, and they need to be used by the Merchants because the Affiliate Networks I spoke with said it was the merchants responsibility not the network.

I felt if the Network would do a little screening on the front end as an application is submitted it would stop the majority of problems. The Network said it would be to be of a burden, and resource drain.

I don't agree and fought it pretty hard with the Networks.. for my effort I got a letter from their General Counsel telling me to let it go,. or they would sue me.

I spoke to their attornies and told them what I thought of them suing me for trying to stop China from frauding the publishers, and merchants. Nuff said.

The answer is be aware.

[Linda Buquet]

Whoa threatened to sue you for trying to get them to do the right thing?
That's harsh!

Well I know for a fact the guys that stole my identity - the checks were all sent to them in China. But you're saying they turned around and deposited them to a bank in US? How? They would have to have a fake ID and bank account set up under Linda Buquet, Shawn Collins, ABC company, XYZ company etc. Well however you cut it, was pretty elaborate scheme and I guess I don't even want to know how they did it and we shouldn't discuss details here in case it gives some scammer that could be lurking ideas.

[Rob_TID]

Defending against fraud in your program is not necessarily about making your program airtight. It is about making it a more difficult proposition for fraudsters than the next affiliate program.

[Mushroom]

We can expect fraud from Countries like China when they know there is no recourse for their action. So what we must do is use some common sense and do some very simple due diligence. Some affiliate networks (or the ones I have dealt with) do not even call the publisher making application to verify information.

Why? is a question I have asked many times, and the only conclusion I have is that it requires resource time on their part. Plus the same for China there is no recourse to the Network for using a Publisher's information even if the person submitting it is doing so fradulently.

I really feel Affiliate Networks will become a thing of the past like Banner Networks and disappear.

Again the Answer is Awareness

[Julia]

This has been a useful thread, and the feedback is great.

I think this is a case where you have to choose carefully which networks you partner with. Both networks and the merchants that they work with have a shared responsibility to screen affiliates carefully, but basically the task comes down to the individual who is managing each specific affiliate program (in my opinion). Occasionally inexperienced merchants join a network and set up an affiliate program expecting the process to be quick and easy without realizing (or wanting to do) all the important administrative work that goes along with it. Like Mushroom said - it's a matter of not dedicating the necessary resources.

That being said, not all networks operate on this model, and I think those that implement the proper anti-fraud procedures will continue to grow sucessfully.