Affiliate Marketing Fraud

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There are various legal issues to consider when you begin an online business other than your state requirements. An affiliate marketer (also known as a “publisher”) should also become aware of the legal issues of being an affiliate, particularly affiliate fraud. It is imperative that affiliates ensure that they are not intentionally or unintentionally committing affiliate marketing fraud.

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Affiliate marketing is a very useful tool that can result in higher revenue for a business and is a means for honest affiliate marketing to earn a place online. However, it is estimated that about 2 percent of all affiliate marketing transactions are fraudulent and one of the consequences is significant increases in chargeback levels. Affiliate fraud prevention is a difficult undertaking. However, to protect your brand and your online business you need to protect your site by instituting some form of affiliate fraud detection.

Merchants have found that it is more cost effective to have affiliate marketers to advertise products and services on their behalf. The affiliate marketer has an agreement with the merchant. The affiliate creates a website and works to drive traffic to his/her own website. Then the affiliate will drive that traffic to the merchant by their advertising and links on the affiliates’ website. In return for the affiliate marketer’s advertisement, the merchants will pay the affiliate marketer a commission for any transactions that are originated by the affiliate marketer through their activities and efforts.

Usually, the merchant will only pay a commission when the consumer actually purchases a product or service from the merchant. Sometimes, merchants will pay-per-click. That means that every time a visitor clicks on an ad or link the affiliate gets paid. Therefore, the affiliate marketer has the incentive to find individuals who will purchase from the merchant.

How Affiliate Fraud Happens

When an affiliate’s website is not able to drive enough traffic to the merchants’ site resulting in conversions, those affiliates cannot produce a sufficient income and may cause the affiliate to become impatient and resort to using dishonest methods to increase profits, thus engaging in “affiliate fraud” (also referred to as “click fraud”).

Dishonest affiliate marketers will take advantage of the affiliate marketing model since affiliate fraud is very profitable.

Affiliate Fraud Activity

Click fraud is one of the main legal issues that affiliates should be concerned about. Click fraud happens when an affiliate clicks on a particular ad or link a repeated number of times for the purpose of increasing commission payments from the merchant or to possibly damage the merchant. Fraud exists because the affiliate is clicking the ads under false pretenses and has no intention of purchasing anything from the merchant that was offered in the ads. Sometimes the affiliate has other people to make excessive clicks instead of doing it themselves. Merchants do not actually receive any true traffic to their site for possible conversion, but still have the liability to pay the affiliate.

Mimic Software – Fraud can be perpetrated by using program software that impersonates web browsers when they click on the merchants’ link. This allows every click to seems as though it is being done by a different visitor. Sometimes the person initiating the fraud will hire people to click the merchants’ link and will then pay those people a percentage of the amount the affiliate receives from the merchants.

A merchant’s competitor may commit the fraud through what is known as industrial sabotage. This is when a competitor will initiate multiple fraudulent clicks that will require the merchant to pay for clicks made under false pretenses, which could cost the merchant large amounts of money. A competitor of an affiliate marketer may also do this on another affiliate marketer’s website as a way to get that website accused of fraud.

Visitor Sign-up – Fraud can be perpetrated when someone signs up with false information without any intention of using the site, or they may stay on the site for as long of time is required to get paid. They will continue signing up with various bogus identities. Someone could also use a stolen credit card to purchase major items from merchants’ sites. Even though the fraud may be detected, many times the affiliate will still get paid.

Parasite Fraud – A parasite is really an adware program that creeps in your computer then onto your website and replaces the affiliate’s merchant link with the parasite link. The parasite gets the actual traffic for free. The affiliate marketer does not get paid and the merchant doesn’t get any true traffic.

Click fraud is a Federal crime and is considered a felony that can reap punishment of large fines and jail time. It behooves an affiliate marketer to not even think about participating in click fraud, but should rather, report suspected fraud to the proper authorities immediately.

Ways to Avoid Affiliate Fraud

The best way to avoid affiliate fraud is to not even consider participating in the act. Never click on your own ads and links. Never get your friends or family members to click for you. Never pay anyone to make false clicks on your behalf.

If you feel uncomfortable about receiving an unusual number of clicks and it doesn’t agree with the amount of traffic you think you are getting, don’t just let it go. Take the time to investigate it because if anyone is using your website to effectuate affiliate fraud activity, you will be the one that may end up paying for the crime.

Earn an Affiliate Marketing Income Honestly

As an affiliate marketer you most likely have experienced being scammed by some unscrupulous so-called guru in your first attempts at starting an online business. Therefore, you know what it feels like to be ripped off of your hard earned money. Don’t return the favor! The best way to earn an income through affiliate marketing is the honest way. Protect your brand and your website.

  • Build a terrific website by making it one that is appealing to the eye.
  • Look for ways to ensure that visitors can find you online by using search engine optimization (SEO). To do that, you must use targeted keywords and use good methods to build links.
  • Continue getting traffic to your website by publishing relevant, content-rich, interesting information for your visitors.
  • Choose the right affiliate programs to put on your website.
  • Use Google analytics to determine what keywords will drive traffic to your site and then continue to publish new content using those keywords.
  • Find different methods to build out your group of back links and inbound links.
 Best Ways to Avoid Affiliate Fraud


Best Ways to Avoid Affiliate Fraud

If you can do the suggestions listed above you will be able to produce hundreds and possibly thousands of relevant clicks. Thus, earning a substantial income the legal way, and not having to worry about looking over your shoulder.

 
 
 
 
Please feel free to contact me if you need help with anything. Just make a comment below or you can always get in touch with me through wealthyaffiliate.com (here is a link to my profile).

Verna
Founder of Mom’s Trusted Affiliate

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4 Comments

  1. Emily

    hi Verna!
    I had never actually thought about affiliate fraud or click fraud. But I do know that affiliate programs always warn new affiliates not to use their own links. However, not too long ago, my computer was infected with a virus. As I would try to go on different web pages it would often redirect me to another Yahoo page (I was using Google). And I could not figure out why. The guy at the computer repair shop then told me that it was probably a page that someone got paid every time I got on it. Therefore, that person was committing the fraud you just discussed!

    Reply
    1. Verna Mason (Post author)

      Hi Emily,

      Yes, someone probably stole your affiliate link and replaced it with their own. Affiliate fraud like that is basically done by dishonest affiliate marketers, who give honest marketers a bad rap. This is the very reason I wrote an article called How to Get Rid of a Bad reputation. That article talks about what we legitimate affiliate marketers can do to help build trust back with affiliate marketers. You should check it out.

      Thanks for taking the time to check out my article. Stop by anytime. Let me know if there is anything I can do for you. I’m always willing to help if I can.

      Reply
  2. Chris

    Yeah this is a pretty dangerous game for affiliate marketers to take on at the end of the day! The scammers sign up for the affiliate options, agreeing to provide further viewing to the advertising in question and receiving a portion of the PPC fees in return. But these adverts end up on sites that are completely gaff – no real traffic and never any chance of any (a click farm). Great article!

    Reply
    1. Verna Mason (Post author)

      Hi Chris,

      Affiliate marketing fraud is something that marketers need to keep watch of just for their own protection. We could get accused of something that was really done by a dishonest marketer or lose income through the fraud activity done by other dishonest marketers. Affiliate fraud is one of the reason that affiliate marketers receive such a bad reputation and we need to try to turn that around. Affiliate marketing is a real, honest to goodness business.

      I aalways try to instill in new marketers to always be honest and aboard with customers and hopefully, we will be able to dispel our bad reputation.

      Chris, thanks for stopping by. I appreciate your comments. let me know if you have any questions I can help you with.

      Cheers,

      Verna

      Reply

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