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Affiliate Fraud Detection

Affiliate Fraud Detection

13 Warning Signs to Help With Affiliate Fraud Detection

We all know performance marketing tactics are a valuable and lucrative way to gain traffic…but how many of those visitors are legitimate?

Do you know how scammers may target you through your affiliate program? Knowing that is the first step to crafting a comprehensive affiliate fraud detection and prevention strategy.

This article will look at how affiliate marketing scams work, along with some of the most common indicators of abuse. We’ll also show how to respond and how to prevent affiliate fraud before it happens.

How Does Affiliate Fraud Work?

Affiliate fraud can be a somewhat opaque topic. Basically, though, it covers any scam that involves affiliate marketing.

There are a lot of scammers who try to take advantage of advertisers and claim unearned commissions. They may use deceptive tactics to funnel fake or bad traffic to the advertiser’s site. Some may even use stolen credentials to impersonate buyers and submit fraudulent purchases.

Advertisers are on the hook for this bad traffic and fraudulent activity. Even worse, many of these instances can lead to chargebacks, meaning the advertiser pays out unearned commissions, then gets re-victimized when the cardholder disputes the purchase.

Learn more about affiliate fraud

Why is Affiliate Fraud so Hard to Detect?

Much of the affiliate marketing process is automated, saving time and effort for all parties. However, this lack of direct human oversight gives fraudsters opportunities to hijack the operation and twist it to their own ends.

For consumers, avoiding affiliate scams can be as easy as recognizing a suspicious link or spammy ad. On the other hand, merchants aren’t targeted in the same flashy ways. They don’t have a lot of oversight regarding the day-to-day practices of their affiliates. Therefore, it can be a lot more difficult for merchants to identify when they’ve been hit by fraud.

Affiliate Fraud Detection

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Also, there are plenty of tactics used by unscrupulous affiliates. New affiliate fraud threats develop constantly. Fraudsters rely on staying ahead of the curve to continue cheating advertisers and scoring unearned commissions.

The key to protecting yourself, as well as your clients and customers, is to identify threats by common indicators and separate bad traffic from good traffic.

Top 13 “Red Flags” for Affiliate Fraud

Inventive scammers can leverage anything from adware and domain squatting to manipulating postback URLs and discount codes.

Below, we’ve identified 13 of the most common fraud indicators to help with affiliate fraud detection:

Chargebacks Coming in Fast

Chargebacks Coming in Fast

It’s a bummer if any leads convert to sales, but then later turn into a dispute. If it happens regularly, though, or if multiple buyers are filing disputes within a few days of a sale…it’s very likely a scam.

The most common timeframe for customers to file a chargeback is 45-60 days after the original transaction. If you notice multiple buyers file chargebacks within a few days after the sale, this could be a clear sign of bad affiliate activity.

Disproportionate Conversions

Disproportionate Conversions

Tricky conversion rates can indicate that something nefarious is going on. If one of your affiliates has a substantially above-average conversion rate compared to other partners, it warrants immediate investigation.

Typosquatting, cookie stuffing, or URL hijacking could generate massive spikes in conversion, but these will be temporary. This activity will ultimately lead to substantial revenue loss, disputes, and chargebacks.

Say you're an advertiser, and your average affiliate has a conversion rate of about 10%. Yet one of your affiliates, for no explicable reason, has a conversion rate of over 50%. This could be the result of fraudulent practices.

Interest in Riskier Products

Interest in Riskier Products

If you carry a range of items in different product categories, some will likely present a greater fraud risk than others. An affiliate who’s relatively new to your program but pushing these riskier products to market could be dangerous. The affiliate may plan to use illegal tactics like incentivizing buyers or account takeover to land sales.

Potential Leads Don’t Know You

Potential Leads Don’t Know You

Paying for leads is the “bread and butter” of many marketing and advertising agencies. But, if your leads have no idea who you are or what you sell… you’ve probably been caught up in an affiliate marketing scam. This type of affiliate scam is relatively ‘easy’ for fraudsters to pull off by posing as a third-party affiliate in a lead-gen program or agency.

Another way this sometimes works is that the customer will contact you for more information. Since they spoke with a scammer, you will have no idea who they are.

Recurring Complaints

Recurring Complaints

If you get similar customer complaints from the same traffic source, it could signify that the affiliate is using deceptive marketing tactics or incentives to inflate sales.

You have to judge all complaints and negative reviews carefully in order to detect affiliate fraud. Keep an eye out for emerging patterns and recurring, similar problems.

Risky Locales

Risky Locales

eCommerce is a global phenomenon. That said, you probably have certain countries and regions that make up the bulk of your customers, depending on your product and clientele.

If you notice an uptick in traffic and sales from a part of the world outside your usual audience, it could be a sign of bad traffic. This is especially true of regions that are known as global fraud hot spots.

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Suspicious IP Addresses

Suspicious IP Addresses

You can look up the IP address of your traffic to see its source.

You might find that a lot of traffic is coming from a known data center, which could be a sign of IP address fraud. It might also be that a scammer is running a click farm to send fake bot traffic to your site. This is one of the most direct ways to detect affiliate fraud resulting from click fraud.

Traffic is High, but Conversion is Low

Traffic is High, but Conversion is Low

Scammers might not be sending you active leads or sales, instead offering reams of clickbait traffic that never converts. This slows your response time and clogs your revenue chains.

As with the irregular conversion rates mentioned above, pay close attention to your conversion metrics for any inconsistencies. Investigating fishy data is never a waste of time or money. Keep in mind that you might not pick up on this affiliate fraud sign if you rely purely on vanity metrics.

Uncommunicative Affiliates

Uncommunicative Affiliates

Be wary of affiliates who either ignore your emails or are slow to respond when you reach out to them. This would be obvious after confronting an affiliate about fraud or other suspicious activity, but it’s a clear red flag if the person “goes dark” for any reason.

Your Affiliate Spams Your Site

Your Affiliate Spams Your Site

If your affiliates send you a ton of questionable links or are linking spammy ads and pop-ups on your site, this is a huge red flag. If any links on your site begin to look and behave like clickbait, odds are that one of your affiliates has been hacked, or are the hacker themselves.

Dropping affiliate cookies on active accounts is perhaps one of the most apparent affiliate fraud methods. In these cases, the scammer is betting on the number of clicks they might squeeze in before you or your affiliate notices, rather than hooking in for the long term.

Poor Web Presence

Poor Web Presence

Is one of your affiliates generating above-average sales, despite having a below-average web presence? If so, this might be a sign of fraud.

Watch for indicators like low-res or stock photography, or poorly-written page copy. Also, keep an eye out for multiple versions of one affiliate network’s site with similar content. This behavior is clearly not above-board for a high-earning affiliate.

Endless Redirects

Endless Redirects

A very common method of spoofing traffic numbers is to redirect users multiple times. For instance, an affiliate might direct one user to a site, but route them through ten different redirects on the way, making it appear that the user visited eleven pages, rather than just one.

Unrealistic Promises

Unrealistic Promises

You want your affiliates to talk up the benefits of your products. That said, you want them to be honest in their presentation.

Unrealistic promises made by the affiliate can mean that you end up with disappointed customers who were oversold on the benefits of your products.

These indicators can help you identify some of the more obvious affiliate scams. However, there’s a simple reason why performance marketing abuse is so pervasive.

Put simply: affiliate fraud detection is tough.

It’s hard to pick up on the signs of affiliate fraud. It’s even harder to predict accurately. So, how do you effectively respond to red flags without wasting time and money?

Get Proactive About Affiliate Fraud Detection

Spotting fraud after the fact is reactive; you can’t do much about affiliate fraud once it happens. That’s why you need to take a proactive approach

You have to ask yourself these three key questions:

What does affiliate fraud look like on my network?

What is the fraudster’s main objective? Are they trying to score a quick commission and disappear before discovering the fraud? Are they using affiliate practices to try and steal goods or launder money?

How are they committing fraud?

Are you noticing specific tactics being used over and over? If so, what are they, and do you see any fraud red flags or other traits that stand out about these transactions compared to legitimate ones?

Is it just an honest mistake?

Appearances can be misleading. Even if you suspect that an affiliate is engaged in fraud, there’s a genuine possibility that the individual simply doesn’t understand that they’re violating the rules of your program. They may have gotten bad advice from a black-hat actor or misinterpreted certain practices.

How do you find the answer to these questions, though? With careful data analysis, of course.

Affiliate Fraud Detection

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You need to organize your data in a way that lets you easily decipher and delve into the numbers. Otherwise, you may end up experiencing “data blindness.” You should build reports based on past patterns and successful fraud attacks, and think about what triggered these incidents. Research the tactics these scammers employed to separate you from your money and learn the warning signs that could have tipped you off before the transaction.

You should also monitor the fraud space just as closely as you watch your customer complaints and feedback. Keeping up on new and developing trends will help you be ready before they become a problem.

How to Protect Your Business From Affiliate Fraud

Once you understand what fraud looks like on your network, you can put the practices in place to target and eliminate those scams. Put that knowledge to work with the following best practices to stop affiliate marketing scams dead in their tracks:

Vet Your Affiliates

Let participants in your affiliate program know that you’ll be monitoring their behavior and traffic, utilizing both proactive and reactive surveying. This will scare away fraudsters, and honest affiliates will appreciate that you take an active role.

Create Strong Contracts

Make your affiliate program contract strong, enforceable, and clear in its stipulations. This will protect you against affiliate marketing scams while minimizing the possibility of innocent mistakes by honest affiliates.

Use Geolocation

This tool will help you pinpoint bad traffic by country, region, or even locality. With geolocation, you can block traffic from parts of the world where you experience heightened fraud or at least subject those sales to additional fraud screening.

Of course, the best way to keep fraud from getting out of hand is to use a specifically created tool to identify and block affiliate marketing scams.

Chargebacks911’s Affiliate Fraud Shield is a first-of-its-kind product created to help advertisers and affiliate networks mitigate the risk of affiliate fraud. This tool employs a combination of human forensic expertise with machine learning technology to score individual transactions for fraud, flag bad traffic, and protect you against criminals.

Affiliate Fraud Shield gives you the power to intercept fraud, stop bad traffic, and protect your revenue stream. Don’t fall victim to another affiliate marketing scam…contact us today and learn how much you will save.


Prevent Chargebacks.

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