Sign up for The Paypers newsletter Follow The Paypers on LinkedIn Follow The Paypers on Twitter Follow The Paypers on Facebook
The Paypers, paypers, Insight in payments, News, Reports, Events
 advertisement
Digital Identity, Security & Online Fraud

Affiliate fraud on the rise, caused by increased Cyber Monday sales

Wednesday 19 December 2018 | 09:59 AM CET

Adobe revealed that US consumers set new a new record on Cyber Monday 2018, which marked the nation’s largest-ever online shopping day at USD7.9 billion.

In 2016, affiliate marketing represented 16% of US ecommerce orders and at that rate, affiliates would have contributed nearly USD 1.3 billion of this year’s record-breaking Cyber Monday sales. Moreover, Forrester Research projected US affiliate marketing spend would increase at a 10% compound annual growth rate (CAGR) from 2015 to 2020, when it is expected to surpass USD 6.8 billion. Moreover, 81% of advertisers and 84% of publishers include affiliate marketing as part of their overall marketing mix.

Scammers use a variety of tactics to commit affiliate fraud, ranging from unethical to illegal. A few examples include:

  • Spam – Affiliates bombard consumers with unsolicited emails to generate clicks.

  • Typo-Squatting – Fraudsters buy domain names similar to a merchants’ own; if consumers mistype the URL, the affiliate’s site redirects and gets credit for a referral.

  • Cookie-Stuffing – These web cookies stay with consumers after leaving an affiliate site, so the affiliate gets future referral credits for unrelated visits to a merchant’s site.

  • Diversion and Site Cloning – Unethical affiliates may copy content or divert traffic from legitimate affiliates and merchants, stealing their leads and rightful income.

  • Bot Activity – Cybercriminals often use scripts or software to imitate consumers, automatically generating clicks or even orders to boost commissions.

  • Malware – Some fraudsters get visitors to download spyware or adware that injects affiliate code, while others use affiliate sites to steal consumers’ personal data.

  • Identity Theft – Criminals have been known to sign up as affiliates and place bogus orders using stolen credit card data. 

Chargebacks911, a dispute mitigation and loss prevention company, notes that affiliate-driven profitability is sparking interest among merchants and publishers alike, but may also draw more criminals to commit affiliate fraud unless the industry takes action. Eaton-Cardone, Chargebacks911’s founder, says that an estimated 2% of performance-driven transactions are likely cases of affiliate fraud.

To combat these tactics, Eaton-Cardone advises online merchants to develop and enforce an affiliate policy that outlines unacceptable practices and their penalties.

More: Link
 advertisement
 advertisement
 advertisement
 advertisement