8 COMMON AFFILIATE MARKETING SCAMS AND HOW TO AVOID THEM
Are you a business owner thinking about starting an affiliate program? Or maybe you are a content creator trying to make a living through affiliate marketing.
Either way, you’re thinking in the right direction! The affiliate marketing industry is currently valued at over $17 billion. Experts predict that this figure will increase to $27 billion by 2027.
Despite the bright prospects of affiliate marketing, you should always be on your guard. Like any other popular and profitable industry, this sphere attracts scammers who are ready to profit at the expense of gullible people and companies.
Some estimates suggest that 9% of affiliates in affiliate marketing experience fraud. At first glance, this may not seem like much, but in 2020 alone, fraudsters caused $1.4 billion in losses!
Moreover, it is not only businesses that suffer from fraud.
In this article, we will talk about the kinds of affiliate marketing scams companies and content makers face. You will learn about the most common fraudulent schemes—four for each group. We will also analyze effective strategies that will help you not fall for the scammers’ hook.
Let’s get to the point!
4 AFFILIATE MARKETING SCAMS ENTREPRENEURS SHOULD KNOW ABOUT
Let’s start by looking at the scams that business owners and affiliate managers may encounter when launching an affiliate program.
1. Bot traffic
Bot traffic is a common fraudulent scheme involving the use of automated software (bots) to generate fake clicks, visits, and even conversions on an affiliate’s website. This way, the fraudster increases their commission income.
This scam hurts merchants because the clicks they receive cannot be converted into sales. Sometimes affiliates use bots to make purchases and then issue refunds after receiving their affiliate commission.
How to avoid this scam:
- Monitor traffic. Monitor your site traffic and other key analytics to identify unusual patterns that may indicate that the affiliate is using bots. For example, a rapid and dramatic increase in bounce rate is one warning sign.
- Verify your visitors. Use multi-factor authentication and CAPTCHA to avoid false orders from bots.
2. Cookie dropping
Cookie dropping is another common scam that merchants and affiliate managers should be aware of. It involves illegally dropping cookies into a user’s browser to receive compensation for sales that the affiliate did not actually influence.
This is a very secretive scheme. First, the scammers register in the affiliate program, like everyone else.
They then secretly embed affiliate cookies on their sites, which are then placed in the visitor’s browser without their knowledge. If the person then makes a purchase from the affiliate, the fraudster gets a commission.
Not only is this practice illegal because the user did not agree to use the affiliate code, but it can also undermine customer trust, increase business costs, and devalue the influence of honest affiliates.
How to avoid this scam:
- Analyze affiliate traffic. Use advanced affiliate monitoring tools to identify abnormally high conversion rates from affiliates. If you find that a certain affiliate is attracting much more people than others, check them out.
- Monitor the customer journey. Monitor user routes and cookie timestamps. If you find discrepancies, it may be worth checking your partner(s) to make sure they are not using spoofing.
3. Fake reviews
Another extremely common form of affiliate marketing scam is fake reviews. In other words, someone pretends that you said something good about their site or brand.
For example, attackers might take a photo of a company’s CEO and Photoshop a made-up quote endorsing their brand. Their goal is to gain trust by leveraging another company’s good reputation.
The thing is, they don’t care about the long term. The scammers just want people to buy into the fake review.
These types of scams have been around for years, with one of the most common being fake celebrity reviews.
How to avoid this scam:
- Work with reliable partners. You can create an affiliate program with a full application review process. This way, you can ensure that potential partners have quality sites without signs of fake reviews.
- Check Google and social media regularly. Search for your brand name and relevant hashtags to see if anyone is making misleading claims or reviews.
- Check your affiliates. Check your affiliates’ websites and social media from time to time to make sure they follow your guidelines and are operating fairly.
4. Typosquatting (URL hijacking)
The last scam on our list is a practice known as URL hijacking. It relies on mistakes people make when typing, which is why it is also called typosquatting.
The attacker buys a URL that is very similar in spelling to the address of another authoritative site, and counts on users who will make a mistake when entering the address and visiting his resource.
As an example, let’s take the fictitious website Shoes4less.com. A scammer might purchase shoes4les.com. Note the missing “s” in the word “less”.
The attacker then gets an affiliate code for the brand he copies. All people who make a mistake and type “les” instead of “less” end up on a fake site.
Here, the scammer may use the cookie substitution we discussed earlier. Or, they may provide a link to a site that has their code attached to it. Either way, it is unethical and a scam that all companies, regardless of industry, should be wary of.
How to avoid this scam:
- Take over URLs similar to yours. In our example, the company should register shoes4les and other variants before they are bought up by scammers.
- Make your website unique. Try to add elements to your website that are impossible and very difficult to replicate. This will help buyers who accidentally end up on a fake page.
4. SCAMS AFFILIATES SHOULD KNOW ABOUT
Now let’s switch gears and talk about the scams that affiliates should watch out for when looking for programs and partners. They are more common than you might think, so be vigilant!
1. Fake experts
If you’re one of the 4.74 billion social media users, chances are you’ve encountered fake experts. These self-proclaimed gurus love to make videos and ads that talk about their “top secret” affiliate marketing strategies.
They usually promise to reveal their secrets if you do something simple, like sign up for an email newsletter. In reality, they just want your contact information so they can try to sell you a practically useless paid course.
As a rule, such people are not experts. If they really were, they would hardly want to sell their secrets to everyone or spend time on training instead of using their “magic” techniques themselves.
How to avoid this scam:
- Always do your research. If you see an ad like this and it interests you, check a few things first. Type the expert’s name, the course title, and search terms that include the words “scam” and “fraud” into a search engine.
- Look for free courses. In most cases, everything these phony experts offer in their courses (and more) can be found for free. Watch YouTube videos, read reputable blogs, and look for affiliate marketing sites that don’t promise mountains of gold and easy profits.
2. “Paid” affiliate programs
As a rule, if someone in an affiliate program asks you to pay before you start working, they are most likely trying to scam you.
Such platforms often promise exclusive marketing channels, abnormally high commissions, or products that the affiliate must purchase and then sell.
In reality, the business only creates hype and makes unrealistic promises in order to profit from beginners and inexperienced affiliates. Partners are told about incredibly high potential earnings, unlimited opportunities for growth and quick financial success. Of course, in the end, the affiliate will not receive what was promised, but no one will return the money spent.
How do avoid this scam?
Don’t pay to join an affiliate program. The best way to avoid this scam is to never pay upfront to join an affiliate program. Reputable merchants will be happy to help you get started for free, as long as you promote their products or services. After all, why would you pay someone to promote someone else’s business?
3. Fake products or services
Another type of scam to watch out for is counterfeit products. These are usually fairly easy to spot, but they have become more and more common in recent years. Scammers create websites with products that do not exist.
They create an affiliate program and allow uninformed affiliates to promote their brand. Their goal is to convince a person through the affiliate to visit a fraudulent site and make a purchase.
In most cases, the attacker will feed you with empty promises and make excuses to your clients and partners for some time instead of providing the promised products and commissions.
By the time people realize what’s going on, the scammer will have already deleted the site and kept all the illegal profits.
How to avoid this scam?
- Look for red flags. If a company offers a product or service on terms that seem too good to be true, they are probably trying to scam you.
- Read the affiliate program’s terms and conditions. Before becoming an affiliate, read the affiliate agreement. Determine if there are any potential loopholes or unclear language that is intended to benefit the merchant.
- Do your research. Research other partners of the company and find out if they have had success. If in doubt, contact them and ask them directly.
4. Bait and Switch
Last on our list of the most common threats to affiliates is the so-called “bait and switch.” This is a deceptive scam tactic where an affiliate is initially promised a certain commission rate, only to have it suddenly change after a few sales.
The change can be overt: the scammer promises a 10% commission, then changes it to 3%. There can also be “hidden fees” that reduce the amount of money you receive per sale. If you are promised 10%, but are charged 25% on each sale, you are not actually receiving a 10% commission.
Companies involved in such activities actively deceive partners by not providing them with the promised rewards.
How to avoid this scam?
- As with counterfeit products, the best thing to do is to read the affiliate program’s terms and conditions. Be sure to ask for a copy of the contract and read it carefully. Then print it out so you have a hard copy in case the company tries to change the agreement. If that happens, having the original contract will help resolve any issues in court.
- Keep track of your commissions. Don’t rely on affiliate managers to track your sales. Keeping track of your own will give you the ability to compare affiliate payouts, making it easy to determine if you’re getting what you were promised.
RESULTS
The affiliate marketing industry is thriving, offering great opportunities for both businesses and content creators. However, like any other lucrative industry, it also attracts a lot of unscrupulous people who engage in fraud.
In this article, we looked at this problem from both the affiliate and company sides. You learned about the most common scams and effective strategies to avoid them.
Whether you’re starting an affiliate program for your business or you’re a content creator looking for great deals, the information in this article should help you avoid problems in the affiliate marketing space.
