Affiliate marketing is a booming industry, valued at an impressive $12 billion worldwide. Many affiliate marketers have built substantial fortunes in the industry. Major brands like Amazon, eBay, and Shopify rely on it as a core part of their marketing strategy.
However, its popularity also means that scams have become a significant concern in the affiliate marketing world. Unethical practices and various types of fraud deceive affiliate marketers and companies looking to launch affiliate programs.
In this article, let’s go through the common affiliate marketing scams you might encounter and discuss practical tips on how to steer clear of them.
What is affiliate marketing?
Affiliate marketing is a way to earn money by promoting other people’s products or services. You sign up as an affiliate, get a unique link to share, and when someone clicks on your link and makes a purchase, you earn a commission.
It’s a popular way of making money online because you don’t need to create your own brand or products. A few other reasons why affiliate marketing is popular include:
- You don’t need a lot of money to get started.
- You can work from anywhere and set your hours.
- You earn commissions as a form of passive income even when you’re not actively working.
- You promote other people’s products, so you don’t have to deal with production or product merchandising.
You might think affiliate marketing is shady. However, many large and reputable companies use it to reach more customers, so it’s a standard and accepted practice in the business world.
Check this out:
Sephora is a well-known business and runs a robust affiliate program.
This email by Base is an example of how legitimate businesses reach out to prospective affiliates to promote their affiliate program.
Is affiliate marketing legitimate?
Yes, affiliate marketing is a legal and legitimate business as long as you follow the rules set by authorities.
For example, in the United States, the Federal Trade Commission (FTC) has guidelines that require affiliates to disclose their relationships with the companies they promote. This means you have to tell your audience that you might earn a commission if they purchase through your link.
Affiliate marketing is also ethical when done right. You just need to be honest with your audience and only promote products you genuinely believe in.
Keep in mind that affiliate marketing isn’t a quick way to get rich. You won’t make a lot of money instantly without putting in effort. To succeed as an affiliate marketer, you need to be prepared to work hard and build a large audience. Only then will you start seeing meaningful earnings from your promotions.
Affiliate marketers—watch out for these scams
Not every affiliate program is reliable. While there are high-ticket programs that pay their affiliates on time, offer high-quality products, and provide fair commissions, these are the rare gems.
Unfortunately, many programs are associated with low commissions, late payments, and poor support. Some might even be involved in affiliate marketing fraud.
This means you must be aware of the affiliate marketing scams you may encounter before venturing into it. Let’s look at five common scams affiliates face.
1. Get-rich-quick schemes
Get-rich-quick schemes are misleading offers that promise fast and easy money with little effort. Such schemes try to lure you in with the idea that you can make a lot of money very quickly just by joining an affiliate program.
The best way to identify a get-rich-scheme scam is the unreal promise it offers. If you come across an affiliate program that claims you can earn thousands of dollars within weeks or even days without working hard, stay away from it. If an opportunity sounds too good to be true, it probably is.
These affiliate marketing scams use aggressive sales tactics to get you to sign up quickly. This could include limited-time offers, high-pressure sales calls, or urgent messages that push you to make a quick decision. The purpose of these tactics is to rush you into joining without fully understanding what you’re getting into.
Plus, such programs don’t provide clear information about how you will earn money. They offer vague details on the steps you must take or the effort required to succeed. In contrast, a legitimate affiliate program will provide clear guidelines and establish realistic expectations about the earning potential.
2. Pay-to-join programs
Pay-to-join programs are affiliate marketing scams where you must pay an upfront fee to become an affiliate. They often promise high earnings or exclusive access to special tools and resources.
Many of these programs do not provide clear or realistic information about how you will earn or how much you can expect to make. They focus on getting new members to pay rather than helping affiliates succeed.
What’s more, the primary way to make money in these programs is by recruiting others to pay and join the program. This creates a pyramid-like structure where your earnings depend on how many people you can recruit rather than on selling actual products.
Asking for money upfront in the affiliate marketing industry is a major red flag.
3. Shady influencers and products
One of the most common affiliate marketing scams to watch out for is fake influencers and products. In this type of scam, you are asked to promote someone who claims to be an expert or guru.
These fake influencers sell low-quality courses or training sessions. As an affiliate marketer, you are encouraged to get people to sign up for these courses, follow the influencer on social media, or join their email list. In return, you’re promised a generous commission.
However, these scammers usually don’t pay out because they either don’t track your leads properly or refuse to acknowledge any sales you’ve made.
Plus, the products you promote as an affiliate marketer can make or break your reputation. If your readers fail to get the promised value out of the products you promote, you will be called out for fraud and lose your audience.
4. Pyramid schemes and MLMs
Pyramid schemes and multi-level marketing (MLM) companies often masquerade as legitimate affiliate marketing opportunities. But these schemes simply exploit people’s desire for easy money.
In a pyramid scheme, you earn money by bringing in new people who pay an entry fee. You make money from their fees, and they make money from the fees of people they recruit—the process continues down through multiple levels.
The problem with pyramid schemes is that only those at the top make significant money, while those at the bottom often lose their investment. If a program primarily rewards you for recruiting others rather than for selling products or services, it’s likely a pyramid scheme.
MLMs earn you commissions based on your sales and the sales made by people you recruit. While MLMs are legal, they can be structured in ways that make it very difficult to earn a substantial income unless you are at the top of the hierarchy.
Plus, an MLM that focuses more on recruitment and less on selling actual products can resemble a pyramid scheme.
5. Phishing scams
Phishing is when scammers try to trick an affiliate marketer into giving away sensitive information, such as passwords or credit card numbers.
Phishing scams use fake emails that mimic official communication from well-known affiliate platforms. These emails may include urgent messages asking you to reset your password to verify your account or update your payment information.
They often look convincing, with logos and email addresses that appear genuine. If you click on the links in these emails, you are directed to a fake affiliate marketing website designed to capture your login details or other sensitive information.
Companies running affiliate marketing—watch out for these scams
It’s time to discuss the other side of the coin—affiliates scamming businesses. As a business, you might come across affiliates who use your brand to sell low-quality products or manipulate traffic with bots, providing little real value.
Here are six scams you should watch out for if you are a company running an affiliate program.
1. Spoof traffic
Spoof traffic is fake or non-human traffic sent to your website, making it look like there are more visitors than there actually are.
The fake affiliate traffic is generated by bots or scripts that mimic real users. The purpose is to deceive you into believing that the traffic is genuine, but all you get are false clicks and conversions.
You end up paying for fake leads or sales that never actually occurred. It drains your budget and reduces the effectiveness of your affiliate marketing efforts.
2. Lead frauds
Lead fraud is a type of online marketing scam where businesses pay affiliates to bring in potential customers, also known as leads. The problem arises when scammers generate fake leads instead of real, interested customers.
These fake leads can be created using various techniques that make them look legitimate at first glance but offer no real value to your business. Some scammers use stolen user data to fill out lead capture forms and make it appear as though real people are signing up or showing interest.
Others buy unverified leads from shady third-party sources, which are often just a list of random or outdated contact information. More sophisticated scammers may use bot traffic to fill out forms with fake data.
Once these fake leads are submitted, the affiliate gets paid, even though there’s no chance of converting these leads into paying customers.
3. Transaction frauds
In this type of affiliate marketing fraud, scammers generate fake sales to earn commissions. The fraudsters may use stolen credit cards or dummy payment accounts to create these fake transactions.
Once a sale is recorded, the affiliate becomes eligible for a commission, but the transaction itself is not legitimate. This means that your business may end up paying out commissions for sales that never occurred.
In many cases, after the fake transaction is processed, the real credit card owner or payment account holder notices the unauthorized charge and requests a refund or initiates a chargeback. When this happens, your business is left not only with the loss of the commission paid out but also with the costs associated with the refund or chargeback process.
Some scammers take it a step further by manipulating your conversion tracking data to make it appear as though they are driving more sales than they actually are. This kind of fraud is difficult to detect because it involves tampering with your system’s data.
4. URL hijacking
Take a look at this:
URL hijacking, also known as domain squatting, is a scam in affiliate marketing where fraudsters register domain names that are very similar to your website. A few examples of hijacking include:
- Misspelled domain—If your legitimate affiliate program runs on bestlaptops.com, a scammer may register bestlatops.com (missing a letter “p”) to target users who accidentally mistype the URL.
- Hyphenated domain—If your website is onlinestore.com, a scammer could register online-store.com with a hyphen, making it easy for users to confuse the two.
- Different domain extensions—If your business operates under fitnessgear.com, a scammer might register fitnessgear.net or fitnessgear.co, using a different domain extension to mislead users.
Once customers land on the fake site, they may be automatically redirected to your real website. The redirection allows the scammer to earn a commission as an affiliate, even though they did nothing to genuinely drive the traffic.
URL hijacking also affects your search engine optimization (SEO) strategy. Scammers may clone your website’s content or use similar keywords, diluting your brand’s online presence and negatively impacting your search engine rankings.
Plus, some fraudulent affiliates may set up redirects in a way that hides the squatted domain from appearing as a referral source. This makes it difficult to detect this type of affiliate marketing scam through tools like Google Analytics.
5. Cookie stuffing
Cookie stuffing is another fraudulent tactic in which scammers secretly place affiliate tracking cookies on a user’s device without their knowledge or consent. The cookies contain the scammer’s affiliate ID and track the user’s activity across various websites.
If the user later visits your site and makes a purchase, the scammer receives a commission as if they had referred the user to the site, even though they had no role in the transaction.
Phishing tactics and malicious pop-ups are most commonly used to secretly install these cookies on users’ browsers. In some cases, simply visiting a webpage controlled by the scammer can result in a cookie being placed on the user’s device, even if the user doesn’t click on any affiliate links.
These cookies can be set to never expire unless the user manually deletes them, so the scammer can continue to earn commissions on future purchases made by the user.
Cookie stuffing is harmful because it undermines the integrity of legitimate affiliate programs. It allows scammers to take credit for sales they didn’t generate, leading to undeserved, inflated payouts.
6. Google Ad hijacking
In this scam, scammers create fake ads that mimic your company’s genuine ads and appear on Google search results. The ads often target branded keywords related to your business or products.
Here is an example:
When customers search for your brand and click on these fraudulent ads, they are taken to a landing page created by scammers that closely resembles your website. This page may use a domain name very similar to yours, often with a slight typo.
The fake landing page looks convincing and prompts users to click a “buy” button, which directs them to your real website. The affiliate gets credit for the sale because the customer originally clicked on the scammer’s ad.
You end up paying the scammer a commission for sales that should have come directly from your ad placement.
Tips to avoid affiliate marketing scams
Scams don’t mean the affiliate marketing industry isn’t real or valuable. It’s a legitimate field with great opportunities, but you must be careful when selecting affiliate programs or affiliate marketers.
Here are a few tips to help you avoid affiliate marketing scams.
Choose reputable affiliate platforms
To create a successful affiliate marketing business, look for the best affiliate programs that have been around for a while and have a good reputation in the industry. For example, Amazon Associates and ClickBank have many reviews on TrustPilot and affiliate marketing forums that can help you gauge their reliability.
You also want to verify the company behind the platform. Look for detailed company information on their website, including contact details and a physical address. Platforms such as CJ Affiliate and Rakuten Marketing offer this level of transparency, so it’s a good idea to use them.
Choose familiar products and services
It’s a good idea to start promoting products or services you know. If you’ve used a product or service yourself that has numerous positive reviews and is widely recognized, it’s more likely to be a safe choice for affiliate marketing.
Promoting familiar products reduces the risk of promoting scams or low-quality products. You’ll maintain your reputation and be less likely to be fooled by false claims or misleading information.
Monitor your website traffic
If you notice a sudden spike in traffic from sources you haven’t promoted, it could be a sign of an affiliate marketing scam.
Regularly review your traffic sources. Ensure that most visitors come from legitimate channels, such as email campaigns or social media posts. Investigate further if you see much traffic coming from unfamiliar or suspicious sources.
Additionally, monitor your conversion rates—the percentage of visitors who complete an action, like making a purchase. An unusually high traffic volume with low conversions might suggest click fraud or misleading marketing tactics.
Check for longer cookie duration
If you’re an affiliate marketer checking out an affiliate program, pay close attention to the cookie duration. The cookie duration is the duration a customer’s activity is tracked after they click your affiliate link.
A longer cookie duration means you have more time to earn a commission if that customer decides to purchase later. Look for programs that offer at least 30 days of cookie duration.
Check for testimonials
Genuine testimonials give you a good idea of what others think about a program. Seeing positive reviews from real users is a good sign that the program is trustworthy.
Be careful, though—sometimes testimonials can also be fake. Look for authentic detailed reviews and see if the people behind them are real and active. Taking a few minutes to read through testimonials can save you from falling into affiliate marketing scams.
Examine commission structure and terms and conditions
The commission structure tells you how much you’ll earn from each sale, so make sure it’s fair and clearly outlined. Some affiliate programs may offer high commissions, but check if there are any hidden catches, like high payout thresholds or other restrictions.
Also, go through the terms and conditions carefully. Here, you’ll find details about payment schedules, cookie duration, and other important legal policies. If something doesn’t seem right or is too vague, walk away.
Ask for a free signup
Before signing up for an affiliate marketing program, check if it requires any payment. Most legitimate affiliate programs are free to join, so if you’re asked to pay, you’re probably looking at affiliate fraud.
Ask the affiliate program directly if they offer a free signup option. If they insist on a payment, take a step back and evaluate the situation. Legit affiliate sites make money when you successfully promote their products, not by charging you to join.
Check for anti-fraud policy
Before you start affiliate marketing, ensure the affiliate site you are signing up for has an anti-fraud policy.
A good affiliate program will prioritize fraud prevention to protect both you and itself. Look for information about how it handles fraud or whether it has fraud detection systems.
If you can’t find this information easily, don’t hesitate to ask the company’s customer support team.
Never fall victim to affiliate marketing fraud again
So, is affiliate marketing real and legit? Yes, but like any business, it requires strong integrity and hard work. It isn’t a shortcut to wealth, but with dedication and the right approach, affiliate marketing can be lucrative.
On the bright side, it offers flexibility, a wide range of meaningful and helpful products to promote, and the chance to earn money online without much investment.
Follow our tips to avoid scams, and you’ll be better prepared to take advantage of affiliate marketing opportunities in 2024.