A Guide On Affiliate Fraud: Learning About It And Avoiding It
There are some legal aspects to consider when running a business on the Internet. Is it ok to open up only LLC company for multiple websites and is payment online safe? These are just two things to think about as an affiliate but there’s much more you should reflect on. Learn about the legal aspects of being an affiliate!
A Guide On Affiliate Fraud: Learning About It And Avoiding It
Friday, Mar 28, 2008
Affiliate fraud is a serious crime, if a tempting one. It springs out of the intense desire of affiliate marketers to turn their affiliate marketing plan into a success. The result can be a lawsuit or jail. If you’re navigating the world of affiliate marketing, it’s important to know what affiliate fraud is and why you should avoid it.
“The problem arises when an affiliate site is not able to drive sufficient traffic to the merchants to make any money, or when the affiliate site becomes impatient to generate large revenue. In this case, the affiliate may resort to affiliate fraud or click fraud.”
Affiliate marketing works by an agreement between an affiliate and a merchant. The affiliate site directs traffic to the merchant through advertising and links on their site. When the merchant gets a hit through the affiliate’s site, the affiliate receives payment. The more hits they get, the more money they receive.
For some sites, simply getting a visitor directed to the site is not sufficient. In these cases, when the visitor signs up and spends sufficient time on the site or when the visitor makes a purchase from the site, the affiliate receives pay.
How Affiliates Get Paid
How affiliates receive payment depends on the affiliate program. Some programs are pay-per-click, which means affiliates make money every time a new user clicks on the ad or link. Others may only pay when the visitor signs up with the merchant’s site. Some may have a combination of payment plans.
Successful affiliate marketing sites attract thousands of visitors to their sites. If even a small percentage of those visitors click through to the merchants each day, it can add up to big money for the affiliate.
Why Affiliate Marketing Fraud Happens
The problem arises when an affiliate site is not able to drive sufficient traffic to the merchants to make any money, or when the affiliate site becomes impatient to generate large revenue. In this case, the affiliate may resort to affiliate fraud or click fraud. In affiliate fraud, the affiliate generates multiple clicks and hence multiple charges, even though there are no actual users. The merchants are not getting any real traffic driven to their sites, but are responsible to pay the affiliate a large sum of money.
How Affiliate Fraud Happens
Affiliate defrauders can perpetrate this crime in a few different ways. They can make use of a program that mimics fresh web browsers when they click the merchant link, so each click appears to be a fresh user. They can also hire people to click the merchant link, cutting them into a percentage of what they receive from the merchant.
Affiliate fraud can also occur through industrial sabotage. Competitors of the merchant may set up multiple clicks to force the merchant to pay for irrelevant clicks, costing the merchant money. Conversely, a competing affiliate marketer may set up repeated clicks of an affiliate site in order to get the site accused of fraud.
Sites that pay upon a visitor signing up with their site or making a purchase can still be victims of affiliate fraud. The defrauder can sign up with bogus information without the intension of using the site, or may use the site for as long as required to get paid and then sign up with another bogus identity. He may use a stolen credit card to make major purchases from the merchant’s site. Upon discovering the fraud, the affiliate site often still receives pay.
Another type of affiliate fraud is parasite fraud. A parasite is an adware program that sneaks onto your computer and replaces the affiliate merchant’s link with the parasite’s link. The parasite gets the traffic for free, the affiliate doesn’t get paid and the advertiser doesn’t get any traffic. There are websites available that can provide you with up to date information on how parasites work and how you can avoid them.
Consequences Of Affiliate Fraud
In much of the U.S., affiliate fraud is a felony and is punishable by time in jail. Affiliate fraud can be punishable by jail time in other countries as well. Major search engines such as Google and Yahoo! have also successfully sued affiliate defrauders. Google has also been on the defendant’s side of a major affiliate fraud lawsuit, settling a class action lawsuit in 2006 for 90 million dollars.
It may seem to a potential perpetrator of affiliate fraud that the fraud is easy to commit and difficult to catch. However, affiliate fraud is uncovered through a number of different methods. Internet advertisers are constantly working on developing new ways to uncover affiliate fraud. If caught perpetrating fraud even one time, that person could find themselves bankrupt, in jail or both.
Avoiding Affiliate Fraud
The first way to avoid affiliate fraud is easy. Don’t do it. Don’t click on your own ads, don’t ask your friends and family members to click on your ads. If you are receiving an unusual number of clicks, an amount not commensurate with the amount of traffic you are expecting to get, you may want to investigate. Remember that if anyone is using your site to perpetrate affiliate fraud, you may become a suspect.
The best way to make money through affiliate marketing is the honest way. Create a great website, one that has an appealing design. Explore ways to make sure visitors find your site through search engine optimization (SEO). That means using targeted keywords and practicing link-building methods.
Keep traffic coming to your site through readable, interesting and relevant content. Pick the right affiliate programs to partner with on your site. Use analytics to find out what keywords drive traffic to your site, and then keep adding fresh content incorporating these keywords. Continue to think of new ways to build out your network of links.
Following all of the above suggestions can generate hundreds and even thousands of relevant clicks, making you plenty of money without having to do anything illegal. In the long run, you can make more money doing affiliate marketing the right way than through fraud, and you won’t have to look over your shoulder worrying about ending up in jail.