How to Prevent Fraud in Your Affiliate Program This Holiday Season



With today’s tools and strategies, there’s no reason to allow fraud to damage your affiliate program’s profit margin. Setting up a fraud check process is easy and only requires due-diligence. With the major shopping holidays coming up, it’s important to talk about fraud, how to spot it quickly, and know what to do when you find it.

What is affiliate fraud?

When it comes to affiliate marketing, fraud is a very broad term that encompasses anything that violates your affiliate terms and conditions, including any unethical or unscrupulous behavior by your affiliates. Unfortunately, there will always be a few unsavory individuals in our industry trying to skirt the system, which is why affiliate managers, both in-house and outsourced, need to be ever vigilant.

Why and how fraud occurs:

  1. The promise of easy-money incentivizes unethical groups and individuals to find loopholes in your terms and conditions and undermine existing fraud-prevention tools that you or your affiliate network have in place.
  2. Lack of fraud check processes by program managers allows fraudsters to operate and potentially ruin an advertiser’s ROI and success in the affiliate channel.
  3. There are countless ways a fraudster can scam your affiliate program. Those trying to defraud you can send you fake leads, bid on your trademark, divert and hide links to cheat legitimate affiliates, use stolen credit cards, and more. All with the goal of making money off of your program.

Just knowing why and how fraud occurs is a good first step to taking action and fighting it.

Easy ways to prevent fraud:

Manually Approve Every Affiliate.

Although manually approving affiliates is  time consuming, especially for large programs, it is your first line of defense against fraudulent affiliates.  Before you approve an affiliate we recommend evaluating:

  • Their website(s) listed to ensure they are aligned with your brand
  • If they meet your brand standards
  • Whether or not they look like a link farm. 

You should also review any notes or history provided by the network (if available) to see if the affiliate has behaved fraudulently in other programs.  

Enforce your new Terms and Conditions.

When you update your affiliate terms and conditions it is always a good policy to send a newsletter out to all of your affiliates announcing the changes to your terms. Be sure to include a due date for affiliates to bring their promotional efforts in compliance to your updated terms. This will ensure that honest affiliates comply with your new terms and allow them time to update their campaigns.

Once the due date has passed, start enforcing your new terms rigorously. There are helpful fraud detection tools available, such as BrandVerity, that can:

  • Monitor for key word PPC violations
  • Aid in your fraud check efforts and
  • Ensure that your affiliates are complying with all of your policies.

Using data to spot fraud.

The most powerful fraud detection tool you have at your disposal is your data. Here are a few key places to check your data for potential fraud:

  • Referring URLs: Use your data to look through referring URL’s and visit suspicious pages you don’t recognize. If you notice several redirects, it could mean an affiliate is trying to hide the real source of traffic from you. Some affiliates also own many different websites, but may only apply to your program using one of their websites. This can be good or bad. If an affiliate has a quality network of websites it can mean more quality traffic, leads and sales for your business. On the other hand, it can also mean the affiliate uses a quality site to apply to your program and then uses a shady second site to actually send you fraudulent traffic, hoping that you don’t notice.
  • Sub-affiliate networks: If you work with sub-affiliate networks like Skimlinks or Viglink, this can add another layer of complexity to your fraud detection efforts. These networks can give your program a tremendous boost by allowing you instant access to thousands of additional affiliates. However, it also means you have less control on what affiliates you let in to your program as they can always re-apply to one of these sub-affiliate networks. Again your best tool to detect fraud from affiliates in these networks is to look at your referring URLs and determine the original source of the lead or sale.
  • IP addresses: Look at all of the IP addresses for your sales and leads. Do multiple transactions come from one single IP address? This could mean one person is placing multiple orders with stolen credit cards or some other form of illegal activity. If you can, try to authenticate these transactions to determine their validity.
  • Historical transactions: Another good way to spot fraud is by identifying trends. If you notice a large abnormal spike from one affiliate, it could mean that something fishy is going on. You’ll want to thoroughly investigate large spikes in sales or leads from otherwise low-performing affiliates.

When you do find fraud in any form, be prepared to take action. Document the evidence and send the affiliate a violation warning. The affiliate may be out of compliance due to a glitch or something innocent and will need time to correct the issue. But if the issue occurs again or the affiliate is caught in another fraud attempt, it’s essential to terminate that affiliate from your program.

Create a routine:

Once you have your affiliate terms and conditions updated and you’re familiar with how to check for fraud in your program, it’s important to create a routine to keep your affiliate program in check. We recommend you set aside time one day each week to go through your data and your fraud checking tools to ensure affiliate compliance.

Start by checking your fraud detection tools, then look at your referring URLs from your sales and leads (pay special attention to referring URLs from sub-affiliate networks). From there, look at IP addresses to ensure no mass duplicate IP’s. Finish up by looking for abnormal spikes in sales and leads from otherwise low-performing affiliates. The last two tasks we recommend adding to your routine would be to create a blacklist of affiliates you don’t want in your program and staying current on industry trends and issues.

Creating a routine and sticking to it is going to give you the best shot at detecting and stomping out fraud in your affiliate program. Keeping this routine will mean higher ROI, better on-brand promotion from your affiliates, and more success overall in your affiliate program.

For more information about how to detect and prevent fraud in your program, inquire about our free affiliate program audits.

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