Fighting Affiliate Fraud - Put Your Detective Hat On

[Linda Buquet]

Many merchants and new affiliate networks ask me about how to screen for affiliate fraud or verify new affiliates. Here's a good general article I just found that can be used as a basic guide. This would be especially helpful as an overview for new affiliate managers.

Affiliate Fraud - Affiliate Marketing Scam - "Affiliate fraud is time consuming, expensive and can seriously jeopardize an entire affiliate program’s business model. Affiliate Marketing is a great way for companies to broaden their reach on the internet but you need to be careful. The only way to fight affiliate fraud successfully is to meet the problem head on, with a comprehensive approach. The range of tricks goes from the traditionally unmistakable monkey business such as forced clicks, bogus leads, fraudulent credit card usage to the more creative and well executed cons such as posing as webmasters of high-profile websites and changing their name and address just before the affiliate checks are issued."

[ExpAds]

There are large numbers of "affiliates" that would seek to place fraudulent leads and/or sales on merchants sites. They are preying on the companies that don't screen their sales/leads well. You have to have a very vigilant fraud detection process in place to make sure you don't end up paying out affiliate on bogus sales. This can be acheived by assigning a customer service rep to phone verifying all you sales and leads as they come into the website.

[lacie]

I have a friend that does phone verification as well and it seems as a good choice. I have also gone to some websites for aff help and told by their "support chat" they are fully legit, log off and go search. Within minutes you can find some of these faulty people out, its really sick to think how bad they prey on some new people (like me, almost fell for two of them, almost).

[Julia]

In my experience, the best way to limit or fight affiliate fraud is to be preventative.

This means taking lots of time and consideration when processing affiilate applications, and only approving those into the program that you are sure are legitmate - (this doesn't mean that they have to be top quality or high performers by any means). Ask as many questions as possible until you get the answer that you need, in terms of how and where they will be promoting your product, and what methods they will be using to drive traffic. Most importantly, make sure that their details are legitimate. 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.

It may be time consuming, but I find in the long run it is better to be proactive than reactive.

It's also wise to keep a very close eye on new affiliates in your program especially when they first start sending traffic and have not yet established a solid relationship with you. This way you can nip any fraud in the bud, if necessary.

Cheers,

[ExpAds]

I agree...a thorough approval, including a phone call, is key. Unless you manage CJ or Linkshare and then you have to take your chances the affiliate you are approving are legit.

[Rob_TID]

My message to affiliate managers is be careful when you reject affiliates.

I make a point of NEVER working again with ANY network that rejects me. And I do this full time and my earnings are only going up so it's really their loss.

The reason I get ****ed, is because stopping 99% of affiliate fraud can be done on a standard fraud risk points system (which my application should NEVER set off). If people reject me, it means that they are either idiots or lazy - in both cases not the type of people I would want to start a long term business relationship with.

Common indicators for affiliate fraud at the application stage are:

free email address
free website
high fraud risk countries (africa, turkey, phils and china and eastern europe being the main ones)
no phone number
fake phone numer
home address that appears on internet (use google)
application from public proxy server

There are a bunch of others, but if a new affiliate matches a COUPLE of these then you usually need to start worrying.

At the sale/lead stage, a lot of fraudulant affiliates try to hussle you into paying out quickly (so you don't have time to check everything) either by email or by phone. Don't be bullied.

The most successful affiliate fraud involves stolen credit cards - I won't explain the process on a public forum but my message to merchants is don't be lazy when checking your sales and affiliate stats.

[Linda Buquet]

Good point Rob. If I remember right you were an affiliate manager too right?
So you know the game from the AM side as well, right?

[Rob_TID]

Yeah, I was Linda, but I like being an affiliate HEAPS more!

[Linda Buquet]

You free spirit, you!

[wisejoker]

Well, make sure that your affliate network allows you to reverse any fradulent transactions within an acceptable time period. If it takes you 30 days or less to verify a lead/sale, then set 30 days.

The danger is when your program is in an affiliate network that insist that affiliates be paid quickly and doesn't factor in that sometimes merchants need time to verify credit card transactions or what not.

With this, I think that it'll be quite safe for the merchant?