Fraud is almost an inevitability in any existing affiliate marketing. But, while you can’t stop fraudsters from trying to attack you, there are ways an effective affiliate manager can minimize bad activity in their programs. These steps will avoid situations like paying illegal commissions, harm to your brand, the ability to keep your ethical affiliates and most of all the consumer trusts between the business and clients.

But, just what is affiliate fraud? It’s typically defined as any illegal activity that is purposely created with the intention of scamming merchants, buyers, and affiliates. The practice of affiliate fraud can include (but, is not limited to) fake leads, typo-squatting, spam, false links, stolen credit cards, and bot spamming through the use of software that will act as if a human was accessing links to generate traffic.

The majority of people perpetrating this type of fraud are usually tech savvy. As such, they avoid detection because of the use of IP proxies, Virtual Private Networks, and other forms of masking their identity. Additionally, their methods are never constant and they’ll usually shift in order to exploit a different vulnerability that has not been patched.

But, then again, they aren’t unstoppable, and here are some of the ways you can fight them:

1. Familiarize Yourself with the Affiliates

While it might seem obvious, it’s not often that people will familiarize themselves with their affiliates. The task is time-consuming and somewhat tedious, but by familiarizing yourself with them, you’ll save yourself a substantial amount of money. In order to do this, be on the lookout for some key pieces of information for the affiliate such as:

• Address
• Social Security Number
• Tax ID
• Phone Number
• Website Legitimacy

A key factor is to approve all applicants manually, and not only check the legitimacy of the aforementioned information but also call them directly. Any affiliates who don’t want to be contacted automatically will raise red flags. However, it’s important to keep in mind the distinction between those who want minimal contact and those who actively avoid you. Remember that this is all business, and you’ll want to know anyone who enters into a business relationship with in case they have to be reached if there are any problems.

Once you reach them, ask the important questions and figure out how they plan to help you generate traffic while keeping in mind your overall business goals.

2. Keep Tabs on Everything

Attention to detail is important in business, but you’re not expected to remember everything from memory. Keep track of all your activity logs, any reports, and records, and verify for unusual activity. Inspect your URLs to spot any potential typo-squatters, and if anything seems irregular then investigate it. When you have an unusual surge of traffic or suddenly witness a spike in sales or leads, don’t chalk it up to coincidence. If an affiliate is making $500 one month and suddenly they reach $50,000 in a week, then something is not right. A possible scenario is that the affiliate is exploiting the system or is perhaps bringing invalid leads. Any sales you gain from this type of behavior are potentially fraudulent and will end up costing your business money. Don’t let the sudden popularity get to your head, and keep a track of any potentially illegal transactions with stolen credit cards or canceled transactions after the commission for the sale has been paid. You’ll always want to do your best to keep track of all the numbers.

3. Detail Your Terms of Service

Your Terms of Service are a key aspect of ensuring your affiliates can’t harm you. By explicitly mentioning all your policies, you’ll avoid providing leeway for any unethical practices. This way your affiliates will not be able to exploit weak or vague wording when defending their actions

A ToS is a contract that will avoid debates or arguments in the future. If your ToS leave any room for interpretation or as their commonly known “grey areas” affiliates might exploit them for personal gain. These loopholes can even become dangerous and risky mistakes for your business.

4. Inform the Affiliates of What Encompasses Ethical Practices

Newer affiliates might be unfamiliar with what constitutes an ethical or unethical practice. It’s important that you take some time to explain to them what they can or can’t do. Additionally, by taking the time to show them that there are studies demonstrating the positive long-term effects of being ethical in their practices and that they will generate more money in the long run. Always communicate with your affiliates and teach them positive tactics and business strategies that yield results. By forming relationships with the affiliates you will ensure they can do their duties in an ethical manner.

5. Don’t Bend the Rules for Anyone

The rules stated by your ToS are important on several levels. If your rules, for example forbid specific keywords, then you’ll need to ensure that nobody is using those. Some particularly crafty affiliates take advantage of the differences in time zones to engage in certain types of less than ethical behaviors under the assumptions that you’re not monitoring them. But, your job is to stop them from breaking the ToS.

Keep in mind that at times it’s ok to forgive an affiliate if they weren’t doing something out of malice, but that type of excuse is a one-time thing. Don’t allow affiliates to commit the same mistake twice as that is a pattern, and since it’s your business, it’s best to eliminate the bad seeds out as fast as possible.

6. Keep Track of the Bad Affiliates

As mentioned earlier, eliminating the bad seeds is important. By maintaining a list of the people who have tried to behave unethically, fraudsters, or those that were declined in the past you’ll be able to steer clear of them in the future. The information provided on your list should include important identifiers such as:

• Their IP
• Websites
• Tax ID
• Reason for Getting Banned from the Business
• Names

This will prevent them from trying to reapply for your business, and in case they change a few details, will still give you an edge over them. Another possible way of gaining insight is joining one of the multiple forums in the industry that will share information on affiliates. With their help, you can possibly identify bad affiliates even before they join your business.

Bad affiliates are one of the quickest ways to ruin a business. It’s important to steer clear of anyone who has had a bad past when working as an affiliate and there are avenues to spot them beforehand. Doing your research and familiarizing yourself with the people you hire will also give you insight into avoiding fraud. A clear Terms of Service will avoid any future legalese battles with affiliates that are out to screw your business over, and by being clear and concise you’ll avoid any potential confusion. Be strict, but know the distinction of when to be lenient, this will save you from burning bridges too quickly, and finally, keep in mind that it is your future at stake when dealing with these affiliates. Do your best to suit the needs of you and your company. By following these tips you’ll minimize the risks and maximize your profits.