Affiliate marketing is a popular way of making money online, but unfortunately, like any other industry, it has its fair share of scams. While there are many legitimate affiliate marketing opportunities available, there are also many scams that can leave you empty-handed, and cost you time, money, and even your reputation. In this article, we will discuss the most common affiliate marketing scams and provide you with tips on how to avoid them.
According to recently released data by the Federal Trade Commission, consumers have reported a staggering loss of almost $8.8 billion to fraud in the year 2022, which is a significant increase of over 30% from the previous year.
Among all the types of fraud, investment scams have emerged as the biggest concern for consumers, with losses amounting to over $3.8 billion, which is more than double the amount reported in 2021. Imposter scams came in second, with consumers reporting losses of $2.6 billion, an increase from $2.4 billion in 2021.
In total, the FTC received fraud reports from 2.4 million consumers in 2022. Imposter scams were the most commonly reported type, followed by online shopping scams, prizes, sweepstakes, lotteries, investment-related scams, and business and job opportunity scams, which included affiliate marketing scams.
Affiliate Marketing Scams: How to Avoid In 2023
Before we dive into the common affiliate marketing scams, it’s essential to understand what affiliate marketing is. Affiliate marketing is a process by which an affiliate marketer earns a commission for promoting someone else’s product or service. The affiliate marketer earns a commission when someone clicks on their unique affiliate link and makes a purchase.
Common Affiliate Marketing Scams
1. Pyramid Schemes
- One of the most common affiliate marketing scams is pyramid schemes. Pyramid schemes are programs that require members to recruit other members to earn money. The focus is on recruiting new members, rather than selling products or services. These schemes are illegal and can cost you a lot of money.
2. Fake Affiliate Programs
- Another common affiliate marketing scam is fake affiliate programs. These programs promise to pay high commissions for promoting products or services. However, once you sign up and start promoting the products, you realize that they are not legitimate, and you never receive payment.
3. Bait-and-Switch Programs
- Bait-and-switch programs are another type of affiliate marketing scam. These programs promise high commissions for promoting products or services, but once you sign up, the program changes. The products or services that you are promoting are not what you signed up for, and you end up promoting something entirely different.
4. Cookie Stuffing
- Cookie stuffing is a type of affiliate marketing scam where a website places affiliate cookies on a visitor’s computer without their knowledge or consent. The affiliate marketer then earns a commission when the visitor makes a purchase, even if they did not click on the affiliate link.
5. Unsolicited Email Campaigns
- Unsolicited email campaigns are a common affiliate marketing scam. These campaigns involve sending unsolicited emails to individuals, promoting products or services. Not only is this illegal, but it can also damage your reputation.
6. Spoof Traffic
- Spoof traffic is a term used to describe fake or fraudulent web traffic that is generated to deceive advertisers or website owners into thinking that their ads are receiving more clicks or views than they are.
- This type of traffic is often generated using bots or software programs that simulate human behavior, such as clicking on ads or visiting websites, but are controlled by a person or group with malicious intent.
- Spoof traffic can be difficult to detect, as it may appear to be coming from legitimate sources, such as social media or search engines. However, it can have a negative impact on the effectiveness of online advertising campaigns and can lead to a loss of revenue for website owners.
- To combat spoof traffic, advertisers and website owners can use fraud detection tools and monitor their traffic sources closely.
How to Avoid Affiliate Marketing Scams
Now that we have discussed the common affiliate marketing scams, let’s look at how to avoid them.
Do Your Research
- The first step in avoiding affiliate marketing scams is to do your research. Before signing up for any affiliate program, take the time to research the company and the product or service they are offering. Look for reviews and testimonials from other affiliates to get an idea of the program’s legitimacy.
Look for Reviews and Testimonials
- As mentioned above, looking for reviews and testimonials is an important step in avoiding affiliate marketing scams. Check out the website and social media pages of the affiliate program to see what other affiliates are saying about their experience. Look for any red flags such as excessive hype or promises of easy money.
Don’t Pay to Join an Affiliate Program
- Legitimate affiliate programs should never require you to pay to join. If an affiliate program is asking for money upfront, it’s a clear sign that it may be a scam. Be wary of any program that requires you to purchase products or services before becoming an affiliate.
Watch for Red Flags
There are several red flags to watch out for when looking for legitimate affiliate programs. Some of these include:
- Promises of overnight success or easy money
- Programs that are too good to be true
- Products or services that are illegal or unethical
- Lack of contact information or customer support
Choose Reputable Affiliate Networks
- Choosing a reputable affiliate network is a great way to avoid scams. Affiliate networks act as intermediaries between affiliates and merchants, making it easier to find legitimate opportunities. Some of the most popular affiliate networks include Clickbank, Amazon Associates, ShareASale, and CJ Affiliate.
Affiliate Marketing Scams to Look Out for as a Company
Google ad hijacking:
- This scam involves fraudsters creating fake ads that look like legitimate Google ads and placing them on websites. When a user clicks on the fake ad, they are redirected to a fake landing page that looks like the advertiser’s website but is controlled by the fraudster. The fraudster then earns a commission for any purchases made on the fake landing page.
- In 2020, Google filed a lawsuit against a company that allegedly created over 100 fake ad agencies and used them to place fake ads on Google’s platform. The scam reportedly cost advertisers over $1.7 million.
URL hijacking:
- In this scam, a fraudster creates a website that looks like a legitimate affiliate website and places its affiliate links on the site. When a user clicks on the link, they are redirected to the legitimate website, but the affiliate commission is credited to the fraudster instead of the legitimate affiliate.
- In 2019, a man was sentenced to over 12 years in prison for a URL hijacking scam that defrauded over 10,000 victims and generated over $36 million in profits.
Fake leads:
- This scam involves fraudsters creating fake leads or sign-ups for a company’s affiliate program. The fraudster earns a commission for each fake lead, but the company does not receive any actual customers.
- In 2018, two men were arrested for a fake lead scam that defrauded companies of over $3 million in affiliate commissions.
Transactions fraud:
- This scam involves fraudsters making fake purchases using stolen credit card information or creating fake accounts to make purchases. The fraudster earns a commission for each fake purchase, but the company is left dealing with chargebacks and lost revenue.
- In 2020, a woman was sentenced to over 10 years in prison for a transactions fraud scam that defrauded companies of over $2 million in affiliate commissions.
Click spams:
- This scam involves fraudsters using bots or software to generate fake clicks on affiliate links, making it appear as though more users are clicking on the links than there are. The fraudster earns a commission for each fake click, but the company is left with inaccurate data and reduced effectiveness of its affiliate program.
- In 2017, a group of fraudsters was indicted for a click-spamming scam that generated over $36 million in fraudulent commissions.
Overall, these are just a few examples of the various affiliate marketing scams that companies should be aware of. By staying vigilant and using fraud detection tools, companies can help prevent these scams from impacting their brand and their revenue.
Avoid Affiliate Marketing Scams as an Affiliate Marketer
Here are some examples and statistics for each of the tips to avoid affiliate marketing scams as an affiliate marketer:
Review the affiliate program’s terms and conditions:
- Before signing up for an affiliate program, it’s important to carefully review the program’s terms and conditions. Look for any red flags such as low commission rates, hidden fees, or unreasonable payment thresholds.
- In 2019, Amazon reduced its affiliate commission rates for several product categories, causing frustration and financial difficulties for many affiliate marketers.
Request testimonials:
- Reach out to other affiliate marketers who have worked with the company before and ask for their experiences and opinions. This can help you avoid scams and ensure that you are working with a legitimate and trustworthy company.
- Many affiliate marketing forums and communities, such as Warrior Forum and AffiliateFix, allow members to share their experiences and reviews of affiliate programs.
Try customer support services:
- Test the company’s customer support services to see if they are responsive and helpful. If you have trouble getting in touch with customer support or if they are unhelpful, it may be a red flag that the company is not legitimate.
- In 2020, a company called Click2Sell was accused of running a fraudulent affiliate marketing scheme. Many affiliates reported that they had trouble getting in touch with the company’s customer support team and that they did not receive the commissions they were owed.
Check the company’s history:
- Research the company’s history and reputation before signing up for its affiliate program. Look for any red flags such as negative reviews or reports of fraud.
- In 2017, a company called MOBE was shut down by the Federal Trade Commission (FTC) for running a massive online business coaching and investment scam that defrauded thousands of people for over $125 million.
Examine search results:
- Search for the company’s name and keywords such as “scam” or “fraud” to see if there are any negative reports or reviews.
- In 2018, a company called MOBE was exposed by a blogger who published a detailed report about the company’s fraudulent business practices. The report went viral and led to the company’s eventual shutdown.
Check if the anti-fraud policy is available:
- Look for an anti-fraud policy on the company’s website or in their affiliate program’s terms and conditions. A strong anti-fraud policy can help prevent scams and protect both the company and its affiliates.
- In 2021, Rakuten Advertising launched a new anti-fraud tool called Fraud Reporting and Investigation Tool (FRIT) to help prevent affiliate marketing fraud.
Look for free signups:
- Be wary of affiliate programs that require you to pay a fee to sign up. Legitimate affiliate programs should be free to join.
- In 2018, a company called MOBE was shut down by the FTC for running a fraudulent business coaching and investment scam that required members to pay thousands of dollars to join.
Overall, these tips can help affiliate marketers avoid scams and work with legitimate and trustworthy companies. By doing your research and staying vigilant, you can protect yourself and your business from fraudulent affiliate marketing schemes.
Conclusion
Affiliate marketing can be a lucrative opportunity for both companies and affiliate marketers, but it is important to be aware of the potential risks and scams associated with it. As a company, it is crucial to be vigilant and take measures to prevent affiliate marketing scams, such as implementing anti-fraud policies and monitoring traffic sources. It is also important to conduct thorough research and due diligence before partnering with affiliate marketers or programs.
On the other hand, as an affiliate marketer, it is essential to do your research and take steps to avoid falling victim to scams, such as carefully reviewing the terms and conditions of affiliate programs, requesting testimonials, and examining search results. It is also important to pay attention to red flags such as high commission rates and suspicious payment methods.
Overall, by taking precautions and being informed about potential scams, both companies and affiliate marketers can enjoy the benefits of affiliate marketing without falling victim to fraudulent activities.
FAQs
Q. What are the most common affiliate marketing scams?
A. The most common affiliate marketing scams include pyramid schemes, fake affiliate programs, bait-and-switch programs, cookie stuffing, and unsolicited email campaigns.
Q. How can I avoid affiliate marketing scams?
A. You can avoid affiliate marketing scams by doing your research, looking for reviews and testimonials, not paying to join, watching for red flags, and choosing reputable affiliate networks.
Q. Are there legitimate affiliate marketing opportunities available?
A. Yes, there are many legitimate affiliate marketing opportunities available. It’s important to do your research and choose reputable programs to avoid scams.
Q. How can companies avoid affiliate marketing scams?
A. Companies can avoid affiliate marketing scams by implementing anti-fraud policies, monitoring traffic sources, conducting due diligence before partnering with affiliate marketers or programs, and being vigilant for red flags such as high commission rates and suspicious payment methods.
Q. What can affiliate marketers do to avoid scams?
A. Affiliate marketers can avoid scams by reviewing the terms and conditions of affiliate programs, requesting testimonials, examining search results, and being cautious of red flags such as high commission rates and suspicious payment methods.
Q. How can companies protect themselves against click spam?
A. Companies can protect themselves against click spam by using anti-click fraud software, monitoring traffic sources, and setting up click fraud detection tools.
Q. What are some warning signs of affiliate marketing scams?
A. Warning signs of affiliate marketing scams include high commission rates, unsolicited emails or messages, and payment methods that are not widely accepted or seem suspicious. It is important to conduct thorough research and due diligence before partnering with any affiliate program or marketer.
Q. What is URL hijacking?
A. URL hijacking is a type of affiliate marketing scam where fraudsters replace the affiliate link in a company’s ad or promotion with their affiliate link, causing the company to pay the fraudster instead of the legitimate affiliate marketer.
Q. What are some ways affiliate marketers can verify the legitimacy of an affiliate program?
A. Affiliate marketers can verify the legitimacy of an affiliate program by checking the program’s reputation and history, examining the terms and conditions for any red flags or unreasonable requirements, and requesting testimonials or referrals from other affiliate marketers who have worked with the program.
Q. What are some common methods used by scammers to generate fake leads?
A. Scammers may use bots or other automated software to generate fake leads, or they may purchase lists of fake email addresses or contact information.
Q. How can affiliate marketers avoid unintentionally participating in click spam?
A. Affiliate marketers can avoid unintentionally participating in click spam by carefully monitoring their traffic sources and analyzing any suspicious spikes in clicks or traffic.
Q. What should affiliate marketers do if they suspect they have been scammed?
A. Affiliate marketers should immediately report any suspected scams to the affiliate program or company, and if necessary, seek legal assistance to recover any lost earnings or damages. It is important to act quickly and take steps to prevent further losses.