15 Affiliate Marketing Scams to guard against in 2022 and beyond

By | May 3, 2022

Introduction

The popularity of Affiliate marketing: What are the statistics?

According to Geri Mileva, Stats shows that by 2022 the affiliate marketing industry is projected to reach an estimated worth of $12 billion, which is approximately thrice its worth in 2015.

In the United States alone, the projected expenditure for affiliate marketing could reach $8.2 billion in 2022, which is up from 7.4 billion in 2021. Thus, from only $2.5 billion in 2012, the spending on affiliate marketing has continued to increase year by year, which suggests that more businesses are incorporating affiliate marketing in their campaigns. This trend is not only in the US; other countries have embraced Affiliate Marketing and are also allocating a large portion of their marketing budget to affiliate marketing.

For instance, businesses in Japan spent about $2.7 billion on affiliate marketing in 2019. By 2024, the affiliate marketing expenditure could go beyond $4.3 billion. Meanwhile, affiliate marketing spending in the United Kingdom reached about $828 million in 2020, which is about 10% higher than the affiliate marketing expenditure in 2019.

Globally, Affiliate marketing spending is projected to grow by over 10% in the next couple of years.

Moreover, 84% of publishers join affiliate marketing. A whopping 94% of publishers join 2 or more affiliate programs, while 39% and 20% of publishers use either 3 or more and 5 affiliate marketing programs, respectively.

(Geri Mileva) https://influencermarketinghub.com/affiliate-marketing-stats

Table of content

Overview of affiliate marketing

Ways fraud is committed

Fraud directly affecting the advertiser

1) Cookie stuffing to mislead the advertiser

2) Spoof Traffic [also known as bot traffic

3) URL Hijacking

4) Fake Leads

5) Google Ad Hijacking

6) Malicious Browser Extensions

7) Human Fraud

Fraud directly affecting the consumer and influencer

8) Fake products

Fraud affecting both the advertiser and the affiliate partner

9) Transaction fraud

10) Domain Spoofing

Fraud affecting directly the affiliate marketer

11) Click spam.

12) Promise to Get-Rich-Quickly Scheme

13) Pay-to-Join Programs

14) Fake products or Services

15) Advertisers willfully defrauding the Affiliates

How to avoid scams

Conclusion

Overview of affiliate marketing

Affiliate Marketing is an advertising system whereby a digital publisher/affiliate or website promotes an online retailer/merchant/advertiser and earns a commission based on the sales or leads that the advertising generates for that online retailer. However, there could be a third party in the cycle i.e., an affiliate marketing platform.

An Affiliate Marketing platform connects an e-commerce site of a merchant (called an advertiser in AM), with a network of affiliates. Affiliates are independent websites such as travel blogs, information pages on diverse subjects and interest groups, etc. who are willing to display advertisement links of different advertisers/publishers/merchants, for a monetary gain.

Consequently, the affiliates drive consumer traffic to the advertiser’s e-commerce site, with the expectation that some of those site visitors might convert visits to sales and become customers of the advertiser. In return, an affiliate earns a commission from the advertiser.

Essentially, there are two advertisement models: Cost per Click (CPC) and Cost per Acquisition/Action (CPA) advertising models. CPC is an advertising model where affiliates are paid a set fee, for traffic generated by each visitor. If the publisher/affiliate’s advertising link is clicked, the publisher/affiliate receives a set amount of money. This model was common at the beginning of the e-commerce era but has lost popularity owing to being prone to fraudulent manipulations.

Currently, the CPA model is more favored by many advertisers/merchants, as an affiliate is only paid a commission if the visitor actually makes a purchase.

Affiliate Marketing fraud and the ways it is committed

As with any other profitable venture, Affiliate Marketing is also not immune to scams. Scammers/fraudsters are increasing and becoming more sophisticated. Affiliate marketing scam/fraud aims to cheat merchants, buyers, and legitimate affiliates, using misleading or fraudulent activities to earn illegitimate commissions.

With the pandemic changing the dynamics of business operations owing to restrictions in movements and associations, many people are online more now, than before. There is a global shift to a remote work environment, and this has resulted in a spike in eCommerce activity.

Even businesses that had not, before the pandemic, opened online stores, have not only done so but have also set up affiliate programs or joined existing affiliate networks.

As people now buy more and from more sources, the chances of fraud have increased, and this trend is set to continue, farther into the future. Therefore, it’s time for retailers/merchants, affiliates/advertisers/publishers to get familiar with the playing field. There are no exceptions, affiliate marketing scam/fraud is real!!

Here below are the 15 Affiliate Marketing Scams/Frauds to Know About in 2022 and beyond. If you want to prevent affiliate marketing fraud, you must get to know your enemy. In this brief review, they are categorized into four groups: Fraud directly affecting the advertiser; Fraud directly affecting the consumer and influencer, Fraud directly affecting the advertiser and the affiliate partners; and Fraud directly affecting the affiliate marketer and Fraud directly affecting

the affiliate/publisher

Fraud directly affecting the advertiser

1) Cookie stuffing to mislead the advertiser

Browser cookies are an essential feature that enables tracking a visitor’s browser’s history and attributing that visitor to a given affiliate in an affiliate marketing program. Cookie stuffing is an activity that allows unscrupulous actors to drop third-party cookies from various advertisers on the visitor’s computer [often without their consent or knowledge].

The aim is to defraud affiliate marketing programs by the scammer/fraudster taking credit if the visitor visits any of the advertisers’ sites and converts. The fraudster will earn a commission even though they did not bring them to the advertisers’ website. This takes away revenue from the legitimate affiliates who work to drive business.

This fraud potentially not only provides substantial revenue to the fraudster but can also cause the affiliate program to pay a commission when no legitimate advertising was happening. Eventually, sufficiently successful attackers will reduce the revenue for legitimate affiliate advertisers so much that the entire business model will no longer work, thereby putting both those free sites out of business and further limiting how free content can be subsidized online.

2) Spoof Traffic [also known as bot traffic]

According to Dmitry Dragilev, spoof traffic is an online advertising fraud where scammers send invalid clicks and false impressions to a website to make it look like they are sending legitimate referral traffic. This influx may include bot traffic and international junk clicks. Using data centers as link farms, scammers “create” fake followers on social media, making it seem like they are credible, valuable affiliate partners who can help a business generate lots of new leads through affiliate marketing.

For a retailer/merchant, this will appear like an affiliate is indeed driving lots of traffic to their site or service. Yet, there are no genuine customers on the other end. The scammer uses bot traffic to game the system, or they might even hire low-paid workers to make clicks on PPC campaigns manually.

This online fraud is the internet equivalent of call center fraud, where people use an auto-dialer or manually make spam calls. These scams are common with either PPC affiliate programs or those that pay per impression. The scammer can make money just by sending traffic, so it doesn’t depend on completing a sale.

3) URL Hijacking

In this fraud, URL hijacking, a fraudster may buy or set up a website, or name a product or service similar to someone’s legitimate business website and redirects the traffic to the fake website to claim commission from affiliate partners. In the redirect process, the fraudsters insert an affiliate link and make a profit from genuine customers. Also, known as typosquatting, this kind of fraud is another affiliate marketing scam that users might not even notice happening.

If you accidentally spell a word wrong, the fake web page automatically redirects you, so you might assume everything is okay. For affiliate programs, this scam can cost a lot of money. Some fraudsters go to the lengths of using SEO techniques to clone the content on the original domain and even steal traffic from the search engine results pages. For the various types of URL hijacking, I refer you to the Affiliate Managers

4) Fake Leads

In this affiliate marketing scam, fraudsters send fake leads to an advertiser or retailer in an attempt to fluff the numbers and defraud the company for a commission. Fake leads are commonly composed of synthetic identities, and most people will never know that parts of their identities have been stolen. Stolen data, often traded on the black market, is used to spoof a genuine interaction in this form of marketing fraud. Scammers will use someone’s personal details to fill in a form registering interest in a product or service. Using specific affiliate links, they can generate revenue in the process. The downside of this scam is that the seller pays for an unqualified lead that is unlikely to have any interest in the product whatsoever.

5) Google Ad Hijacking

In the Google ad hijacking scam, the fraudster creates fake ads to appear above search results in Google, thus luring the web browsers to click on illegitimate affiliate links. Alternatively, your brand’s paid ad space can be hijacked to steal your direct traffic simply by outbidding you for a branded keyword. If they are successful, the scammer will place an identical copy of your ad and use the same display URL to fool users into clicking their ad. People who click the ads assume they are visiting a legitimate site, but when they make a purchase, scammers claim credit for the affiliate commission. Aside from costing them money and potential sales, this hijacking can damage a brand’s reputation. Most affiliate partnerships don’t allow marketers to target ad keywords relating to the company’s products or services.

6) Malicious Browser Extensions

In this fraud, malicious software or extensions are loaded onto a visitor’s computer, where they add tags to URLs, intercept browser requests, modify traffic, monitor visitor activity, or perform other activities that reward the fraudster.

7) Human Fraud

Through the use of large groups of individuals, fraudsters perform coordinated activities such as clicking on ads, filling out forms, signing up for newsletters, or following website referral links to generate impressions. This more nuanced human behavior makes it harder for fraud detection methods to succeed.

Fraud directly affecting the consumer and influencer

8) Fake products

In this kind of fraud, the scammers create either Ads or web pages or both for products or services that don’t actually exist. Typically, the fraudster will promote the fake products under the guise of a well-established business, going as far as to falsify a reputable company’s website and branding to gain the trust of potential customers. This type of fraud is very deceptive, as the fraudsters can try to leverage the credibility of influencers and other successful websites to convince people to purchase fake products.

They go to social media and entice those with a following to be a brand ambassador or be an influencer to the brand that they’re claiming to have. Typically, celebrities or social media influencers you admire, once taken on board by these fraudsters, will be the ones used to recruit their followers to show off their products. First, you receive a direct message asking you to buy the fake product at a reduced price, assured that some of the money goes to a charity. But you will find that the product is either overpriced or never arrives. Social media has become a nesting ground for fake product ads, with countless examples of these scams on the Facebook marketplace.

Fraud affecting both the advertiser and the affiliate partner

9) Transaction fraud

In the payments’ industry, fraud is the illegal usage of credit card details without the real cardholder’s knowledge. A stolen credit card/card number is usually the cause of a fraudulent charge. Likewise, in transaction fraud, stolen credit cards or online accounts such as Pay Pal, are used by the fraudsters to make transactions via an affiliate partner’s account.

Often the most costly for businesses, this occurs when a fraudulent affiliate fakes a sale (often with stolen credit card numbers) and collects the commission for the sale before the fraudulent purchase is flagged or the product returned. The victim business may also face chargebacks and additional shipping fees.

This scam doesn’t just impact the advertising companies—it also robs genuine affiliate partners. For a retailer, transaction fraud means they get hit from all angles. They pay commission to the affiliate’s account, lose a product to the thief, and also face losing out on the revenue as the affiliate will inevitably request a credit card chargeback after discovering the identity fraud!!

10) Domain Spoofing

Domain Spoofing, also referred to as Web spoofing is where fraudsters create websites that mimic real websites to conduct fraud activities, such as stealing identity information or account credentials. Specifically, it is the domain name that fraudsters target and then create a fake domain name that appears as a legitimate/whitelisted domain name.

This fraud affects both the advertiser and the publisher (the affiliate). On the advertisers’ side, fraudsters spoof their domains to avoid being placed on the blacklists, while on the publishers’ (affiliates’) side the fraudsters falsify the domain name such that it appears that the traffic was from publishers in the whitelist. Domain spoofing is normally done in Ad networks via Malware & Tool-bars or Ad Tag Misrepresentation.

Fraud directly affecting the affiliate marketer

11) Click spam

According to PPC Shield, a recent report from Adobe indicates that 28% of web traffic comes from non-human sources!!. This means that this non-human traffic is accountable for most click fraud. In the Click fraud a person, computer program, or generated script, attacks advertisers by repeatedly clicking on a PPC ad to increase ad spend, lower conversion rates, and distort performance data (eventually, it also negatively impacts the ROI).

This fraud is clicking on an online ad, usually with malicious intent. This could be due to “draining” the advertiser’s budget in an attempt to remove ads from search results or redirect ad spending to third parties or scammers.

The negative impacts of these fake clicks on an affiliate can be felt if you placed paid ads on your website. In this instance, fraud on your paid ads can cost you in a range anywhere from a few pennies to over a hundred dollars, depending on the CPC (cost per click) of your ad. Besides, click fraud can affect any form of paid advertising, including paid search results, banner ads, video ads, or native ad content. Bad actors drive traffic from users without their consent or knowledge, making it look like the clicks come from someone using a mobile application

12) Promise to Get-Rich-Quickly Scheme

Affiliate marketing is not like playing the lottery. Therefore, be on your guard if a program promises you that you will get rich quickly, especially by doing very little!! There’s just no such thing as getting rich quickly. As an affiliate, you will be required to work hard and progressively grow your business. Even then, you will not become a millionaire overnight

Before applying to join an affiliate program, be keen to spot if it is among either those get-rich-quick schemes or those that promise that you can make a lot of money with minimal work and in a short time. These are scams because you’ll need to invest time and hard work to make affiliate marketing a successful venture. Join such programs that are realistic and have clearly-defined payment plans. Although in terms of monetary value these programs’ promise will be lower, yet you will find that they are far more realistic. In a general, realistic affiliate programs offer commissions ranging from as low as 2% to 30% per conversion, depending on the product or service, or brand promoted by an affiliate.2) Pay-to-Join Programs

13) Pay-to-Join Programs

Another common affiliate marketing scam involves a “program” asking the prospective affiliate partner to pay for their memberships. Although at a glance, this may appear to make sense that you have to pay to join a company’s affiliate program, it should raise a red flag; because most credible affiliate programs are completely free to join. Why should it be like this is because, as an affiliate/publisher, you will effectively be working for the company that has set the program up? So, since you will not be required to pay for a real-world job, likewise you should avoid any scheme that asks you to do so to join their program as an affiliate.

Notably, the moment you are lured to buy into a scam like this, chances are that you will neither see your money again nor make any additional income. Therefore, before signing up for any program, ensure the legitimacy of the company behind the program. For instance, find out: a) if there is a list of clients on its website, and b) if there is/are positive feedback (s) about the program? If not, it may be a sign that you need to look elsewhere.

14) Fake products or Services

In affiliate programs, marketers/publishers earn revenue by promoting products or services created by other (often much larger) companies. These well-established companies with online stores and also with or subscribing to any affiliate programs are the target of scammers. Their fraud involves creating fake products or services and promoting them under the name of a well-established business. Specifically, scammers may craft full product catalogs, write fake customer reviews for each offering, and in other instances promote their businesses by using paid phony spokespeople.

As the marketer/affiliate looks for companies offering affiliate programs, he/she will land on a fraudster site, thinking that it is from a credible advertiser. Be wary of a scam if the following are observed: a) if you observe an abundance of overly positive reviews. Note that even the best services will have a few negative comments, so be wary of any that don’t; b) False products are also likely to have poor quality images – such as stock photos, which are normally taken from other websites. Yet real brands take the time to carefully photograph their offerings.

As John Hughes suggests, if you aren’t sure whether a program or product is real, your first step should be to check the brand’s official website. You should be able to find the products or services in question, as well as a page for the affiliate program. If you can’t, then it’s probably a trap.

Another effective way to identify fake products or programs is to do your research. Enter a search term like “[product name] affiliate scam” in Google Search and see what comes up. If you’ve been drawn to a fake, chances are other people have been, too. And those who’ve been burned are likely to talk about it online.

It may also be worth contacting the business owners directly. They’ll be best equipped to provide a solid answer and may even escalate the issue to prevent other affiliate marketers from being scammed.

15) Advertisers willfully defrauding the affiliates

In this scam, advertisers willfully omit some of the sales transactions that should have earned a commission for the affiliate, by deliberately either not recording some tracking information, or adjusting sales volumes, or both.

Essentially, Affiliates can measure the volume of traffic their websites have generated towards each advertiser’s e-commerce site, by monitoring and logging each click-action by visitors to affiliate’s websites. Nevertheless, if any of those clicks converted to a sale and if so, the value of such sale would not be known to the affiliate, unless the advertiser is willing to implement a tracking code, that would notify an affiliate, in real-time, of these transactions, as and when they happen. Hence, the affiliate relies upon the trust, that the advertiser would be honest in the declaration of the transactions. This is where fraud may be committed by the advertisers!!

How to avoid scams

Outsource services of Affiliate Marketing/Performance Management Platform

For the advertisers and affiliates, it is better to outsource the managing of affiliates as well as tracking transactions. A third party i.e. Affiliate Marketing/performance Marketing Management Platform may be outsourced to coordinate these activities. Such specialized platforms are said to have technical capabilities to track transactions across the affiliate network and reporting capabilities that keep affiliates and advertisers up to date on their performance and amounts of revenue and commissions earned. Therefore, advertisers, affiliates, customers, and the Affiliate Management Platform (AMP) are four parties that are stakeholders of AM.

The main advantage of outsourcing the affiliate management services is the ability of the Affiliate Management Platform (AMP) to provide unbiased transaction and performance data, which works like a third-party audit, and helps to win affiliates’ trust, that the data has not been manipulated by the advertiser. Furthermore, it gives greater credibility to the Affiliate Marketing program of the advertiser.

The main disadvantages are the subscription cost and the compromising of information security. The third-party AMP receives all the detailed transaction information of not only the online sales that were driven by affiliates but every online sale of the company, including direct sales through organic searches, search engines, and direct URL visits. For more information on the benefits of outsourcing affiliate management, I refer you to Amarasekara and Mathrani’s detailed article.

Know who you’re dealing with.

If you’ve only ever met someone online or are unsure of the legitimacy of a business, take some time to do a bit more research. Do a Google image search on photos or search the internet for others who may have had dealings with them. If a message or email comes from a friend and it seems unusual or out of character for them, contact your friend directly to check that it was them that sent it.

Testimonials

If you sense fraudulent activities or you see the quality of the website is poor, hesitate to sign for the program. Please first verify the authenticity of the company by asking for testimonials from the company. Never trust the reviews they publish themselves on their website. Rather, ask for the names and email addresses of people, who have been on the program before such that you contact and obtain first-hand information about how the program worked for them.

Do due diligence and do not ignore even the negative reviews. You may find that such information in the “negative review report” was what you needed to make an informed decision. Note also that some people are simply not suited to certain programs, and this can be ascertained from their testimonials. If you decide to join a program, then you can also use these testimonials to get tips on what to do and avoid.

Customer support and physical address

Go to the customer support page. Ask questions and see how they are going to respond to your concerns or their response in general. How long will it take them to respond? Are they willing to provide marketing advice for their products?. Note that a genuine company will always want you to succeed because they realize that you are a potential partner in the growth of the company and thus will ensure that you succeed for them to extend further their success too. Besides, it should have a toll-free phone number and a customer support email address. In case these basics are missing then think twice before going ahead with this venture.

Transparency in the payments

As pointed out above, be wary of the affiliate marketing programs that promise heft commissions. That said, I advise that you understand the affiliate program’s commission scheme. What percentage commission, when do they pay, and if there is any security in the payment system. Unrealistic commissions, similar to get-rich-quick schemes should be suspected. It is true, that there are legitimate affiliate programs that payout well such as dealing with tourism and hotel. You may find that an offer of $ 100- 130 per booking may be offered. The bottom line is be careful.

Anti-fraud policy

Make sure that the Ad networks you work with, as well as the CPA networks you use, have official rules or an anti-malware stance that should help you understand how they treat fraudulent traffic and unscrupulous advertising. Do they have the means to continually monitor each traffic source? Can they recognize a redirect attempt and flag it as suspicious? When the algorithms detect fake traffic, they check all impressions from that source and block it.

Conclusion

In conclusion, I have briefly explored fifteen affiliate scams which you may encounter from now on. This least is not exhaustive. Scammers are increasingly becoming “clever” as technology to curtail or eliminated their activities come into use. However, at the moment the best way to smoothly run an affiliate program with minimum fear of fraudsters, would be to outsource the services of an Affiliiate Marketing/performance Management Platform. Although privacy of the advertiser is compromised, the benefit far out ways the loss.

For more information about online fraud and how to mitigate it you can further consult the following:

https://www.thesearchmonitor.com/affiliate-marketing-url-hijacking-worry/

https://easyaffiliate.com/blog/affiliate-marketing-scams/

https://adsterra.com/blog/affiliate-marketing-scams/

https://www.ppcshield.io/blog/preventing-click-fraud-in-affiliate-marketing/

https://www.anura.io/blog/5-affiliate-marketing-scams-companies-should-watch-out-forhttps://coschedule.com/blog/affiliate-marketing-scams

https://www.researchgate.net/publication/290436549_Exploring_Risk_and_Fraud_Scenarios_in_Affiliate_Marketing_Technology_from_Advertiser’s_Perspective

4 thoughts on “15 Affiliate Marketing Scams to guard against in 2022 and beyond

  1. Aly

    Wow! I definitely didn’t realize that there were so many big affiliate marketing scams to be looking out for!! Thanks for the roundup – this was a good read to help understand the current status and how to best move forward in this environment. I appreciate the extra links at the end as I am certainly interested in learning more!

    Reply
    1. admin Post author

      Hi, Aly, thank you very much for reading this post and more so to recognize how scammers are inventing new means to reap where they have not sown. I know if you continue to do research you may discover even more!! Thank you once again

      Reply
  2. Rafael Jimenez Jr

    I knew there was a lot of scams out there but didnt realize all the different types you talked about in this article. Thanks for opening my eyes and providing me more knowledge on what to look for. I been scammed years ago and I told myself it will never happen again. Thanks for the info 

    Reply
    1. admin Post author

      It is true, Rafael, scammers do not sleep!! They keep on “inventing” new schemes in order to reap where they have not sown. I am digging for more and soon will be exposing them too. Thank you very much for adding your voice to expose scams.

      Reply

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