Affiliate Fraud - Should You be Concerned?

Today we’re going to go a little bit off the beaten path and talk about affiliate fraud. I’ll show you some common ways that people use to cheat the system and then show you some tools you can use to help combat it.

Starting off, let’s define affiliate fraud.

Affiliate fraud is simply the act of obtaining commissions in an illegitimate manner. Notice that I didn’t say illegal.

Let me give you a couple of examples. I’m selling a product through clickbank. When someone wants to purchase from me they will click on the link that I have provided.

Clickbank links usually look like this

http://xxxxx.yyyyy.hop.clickbank.net

If you clicked on a clickbank link, the user that is listed where xxxx is would get paid whatever commission yyyy is paying.

So this brings up a very simple method to game the system. Go get a Clickbank account (it’s free). Then find out what the url for the product you want is and replace their username with yours.

When you purchase - you get the affiliate commission and are basically getting the product at a discount.

Now, like I said before, this is illegitimate but it’s not illegal by any stretch of the imagination.

Do I do this? Nah - it’s simply not good business.

There’s another method of affiliate fraud. First, you buy a product for whatever they’re selling it for.

Read the ebook or whatever.

Few days later you ask for a refund.

Clickbank pretty much forces you to give a refund within 60 so the person that did this got a free product.

Now, this one is probably a bit closer to being illegal - I would imagine a good lawyer could get someone on fraud for this.

Again you ask - do I do this? Nope. Like I said before it’s not good business.

Affiliate fraud is something that James Brausch has discussed on a few occasions.

In fact, he posted on it today. He starts his post off talking about a couple of ways he was defrauded.

A couple of quotes first:

In fact, the last test I ran was with a single affiliate who is known and trusted. He has a fairly small readership, so the numbers were expected to be small.

I asked him to do a weekend test of marketing the Testing newsletter as an affiliate. He agreed.

He decided to add his own tracking. He offered a bonus if they would send their PayPal receipts to him.

The result?

I show zero sales.

He shows two sales, but he identified that one was fraudulent. They forget to even change the date on their PayPal receipt. They simply sent him a receipt from my launch.

The other one did change the date on his receipt. He also bought during my launch, but lied and claimed he bought during my affiliate partner’s launch in order to get the bonus.

And also this one:

In a prior test, I saw one newcomer (ie: someone I had never heard of before being active as a customer or reader of this blog) send 1 visitor and get 1 sale. I waited. That was it.

It looked fishy, so I held off payment. The inevitable refund request came a couple of days after the product was delivered.

Their plan was a common method of affiliate fraud. You send a friend to buy the product, then you collect the commission and then you have your friend ask for a refund. You come out with the product for free… and some cash (the commission).

The first quote shows yet another type of affiliate fraud. And the second quote confirms one of my comments above.

So James is asking for people to help him out.

He’s concerned about two things:

1. He’s ‘losing’ money.
2. His affiliates lose money.

Let’s look at #1 first…

I’m going to be a bit harsh here…My entire response to ‘losing’ money because someone replaced affiliate usernames in the url and got themselves a discount?

WHATEVAH!

No, seriously, does it really matter?

There was a guy who was a taxi driver in New York several years back. He got into the stock market -if I recall correctly it was buying and selling options, stocks, etc.

One of the things that has stuck with me over all this time is the following quote:

You can’t go broke making a profit.

Huh? You can’t? Nope.

When I have read James’ posts on the subject of affiliate fraud, I have noticed he gets rather irate about it.

Now, in the first place, James is a millionaire (or claims to be and I have no reason to think otherwise). And he’s worried about a few dollars?

Sure, there’s the issue of it being rampant in some industries but honestly, it’s not worth the emotional energy.

As you know I’ve been fighting cancer for the past 4 years. Since last year in July I’ve been in remission (yay).

But during all of the treatments, the therapies and so on. I realized that there are some things that are actually worth spending your emotional energy on and some things that aren’t.

I’m sure you’ve heard this before:

What comes around goes around.

And it’s damned accurate from what I can tell. It seems to be this universal law that if you screw people, you’re gonna get screwed yourself.

So, my response to James in the first bit is - dude - chill out, relax, take a few deep breaths and move on.

You’re still making a profit!

Ok so what about the second issue? Is there any way to stop someone from taking your affiliate commissions?

Yep. There are a couple of ways.

The first is simply cloak your links. I mean, duh - this one is so simple. There are plenty of free and paid products out there to help you cloak your affiliate links. Here is one .

It should just be a basic Google search away but if you’ve got problems identifying a good one, respond below and I’ll give a few recommendations.

There’s another way that you can protect yourself but this deals more with the owner of the product than it does with the affiliate.

Specifically, you use a solution like Software Defender.

What this product will do is encrypt your product in such a way that the server is contacted each time someone opens it. If they’ve tried to beat the system by getting a refund, you simply disable their access.

Does it have a cost? Sure does. It’s about $20 a month. If you’re making any amount of sales you should be able to afford that expense!

I like to apply the SWSWSWSW policy to these types of things.

Some Will, Some Won’t, So What, Someone’s Waiting

At the end of the day you’ve really only got so much time and energy to spend on stuff so why not focus on the positive instead of the negative?

Ok. I’ll get off my soapbox now. And James, I hope you find the product above useful in your business. I do know that you’ve taken the SWSWSWSW policy on some of your products where you didn’t have a subscription system in place.

G-Man