What is Fraud, and How to Against It?

Hello, dear community! Today we will discuss fraud. It’s that taboo subject not often mentioned, although it certainly deserves discussion. Sometimes, completely legitimate campaigns are mistakenly classified as fraud. So, to protect yourself and to generally prevent unintentional fraud in your work, let’s talk more about this phenomenon.

We will also discuss how advertisers protect themselves from fraud and how affiliates can avoid finding themselves in a bad situation when inadvertently channeling low-quality traffic to an offer. These situations also exist, and we will explore them in this material.

What is fraud?

There is a general understanding of the word “fraud,” as well as a more specific one relevant to our topic. Generally, fraud involves complex fraudulent actions aimed at stealing personal data from clients, including payment details, through the creation of fake stores that may mimic existing services. The fraudster, having obtained credit card details, transfers the money to themselves.

Another type of fraud occurs when someone makes payments in a store not with their own money, but with a stolen credit card. This type of fraud can stem from the first type or be completely unrelated to the e-commerce market. After all, a stolen card can be used to make payments even in a grocery store, and it still counts as fraud.

Fraud in Affiliate Marketing

In terms of Affiliate Marketing, there are various interpretations of fraud. We have previously discussed this term in our glossary, which I recommend you check out.

Typically, fraud is understood as the channelling of low-quality traffic by an affiliate. Low-quality traffic is not only about bots but also traffic that does not meet the advertiser’s conditions, for example.

In other cases, any fraudulent actions aimed at earning a commission can be considered fraud. Therefore, if you were sourcing traffic from permitted sources but intentionally misled the recipient, that would also be considered fraud. Consequently, you wouldn’t get paid, and in the worst case, your affiliate account could be blocked.

Deception can occur in various ways: from outright lies in advertisements to creating invisible ad blocks that completely cover the main content of a page.

Advertisers can also be directly deceived. For example, through ClickUnder, where the fraudster loads fake cookies and even false UTM tags for the user, allowing them to literally steal targeted traffic.

There are also various types of malware that can spam a user’s device with advertising messages.

In the case of CPV, where payment is made for ad impressions, fraudsters can engage in ad pixelation. This is also a type of malware that displays ads to the user in the form of tiny pixels. The user does not notice it (although their computer may start to slow down if there is too much such advertising), views are counted, and the affiliate is happy—until they get banned, of course.

In Which Verticals is Fraud Most Common?

Let’s talk about the verticals where fraud is almost a norm.

• Installs. Mobile has been suffering from fraud for quite some time. Advertisers use a multitude of available tools to somehow counteract this, but so far, it’s not very effective. Fraud occurs through install farms, where a certain number of people deliberately boost app installations.
• Dating. Bots that simulate the activity of real people are almost always present in this vertical. However, this is quite obvious. Other users might even complain that a certain profile behaves unnaturally and is likely a bot.
• E-commerce. If the target action is order confirmation via a call, it’s a haven for fraudsters. Fraud here includes buying calls on click farms and using special software to spoof phone numbers or even automate calls. A hold, which advertisers implement, is far from always a panacea. Because the term for retaining an order sometimes lasts longer than the duration of the hold, so an affiliate might still receive commissions they don’t deserve.

It’s clear that fraud exists under certain monetization models. For example, in the case of RevShare, fraud is almost impossible because bots don’t make purchases, don’t deposit in casinos, and generally don’t do anything useful (for now).

If the monetization model does not require significant effort to achieve a conversion, then fraud will thrive there. Such models include CPL, CPC, CPI.

How Do Advertisers Try to Combat Fraud?

We’ve discussed the actions related to fraud. Now let’s move on to counteractions. How do advertisers prevent fraud?

First, there’s a hold. A hold is a certain period after a conversion during which commissions will be “frozen” to allow the advertiser to assess the quality of the traffic. This doesn’t directly prevent fraud, but it allows the advertiser to save money that would otherwise have to be paid to a fraudulent affiliate.

During what’s called “fraud control,” traffic is analyzed based on certain indicators. Attention is paid to:

• The CTR of the advertising campaign. A high number of clicks with no further activity is a clear sign of fraud in the eyes of the affiliate network;
• A somewhat opposite situation, where a user makes the target action immediately after clicking, can also be deemed fraud, especially if this phenomenon is systematic;
• Identical IPs, or conversely, different IPs where they should be identical: a person clicked with one IP but performed the target action with another;
• A uniform behavior factor for all users who clicked on an advertisement.

There is also special software that helps better detect fraud. It can analyze the data we’ve described above and use information known about existing bot farms for analysis.

Just as fraud methods and the means to combat them are constantly evolving, you should not rely on easy money obtained through fraudulent means. Firstly, you won’t earn enough to cover all the risks you might face. Secondly, even to channel bots to an offer, you need to invest money, which you won’t be able to recoup if your account is banned for fraud. And it will be banned.

How Can affiliate Protect Themselves From Fraud?

Not only advertisers need to protect their campaigns from fraud, but affiliates themselves need to safeguard their campaigns against it. Unknowingly, you might channel low-quality traffic to an offer, leading to penalties from the affiliate program.

We recommend being meticulous with campaign settings, especially targeting characteristics. For example, most primitive bots operate on old operating systems. Older OSs are easier to hack and infect with viruses, which means fraudsters can use your affiliate link and promote it through ad pixelation, which we discussed. You won’t profit from this, but you’ll have plenty of problems to deal with.

We also recommend using only quality ad networks, as they have built-in anti-fraud measures, like those found in Google Ads. Moreover, you can use paid anti-fraud systems that use special algorithms to identify suspicious traffic, which you can then filter out.

If you’re directly purchasing advertising on various platforms, pay attention to their reputation.

Conclusion

Fraud is a major headache in affiliate marketing. It harms not just the advertiser but also the affiliate and the industry as a whole. To protect yourself from fraud, always stay informed about developments in affiliate marketing. If you’re unsure where to find the latest news, visit our cozy Telegram community, where we discuss everything fresh daily!

As always, with respect, your Geek!