Alliance fraud

Alliance fraud, also known as affiliate fraud, refers to the act of criminals using system loopholes or improper means to obtain commissions in alliance marketing activities. As an effect-based online advertising model, affiliate marketing allows brands to cooperate with affiliated companies to earn commissions by promoting products or services. However, the automation and dependence on digital tracking of this model provide an opportunity for fraudsters.  It is estimated that in 2020, the amount of alliance fraud will be as high as $1.4 billion, and this number is likely to increase further with the expansion of alliance marketing. Alliance fraud not only harms the interests of merchants, but also destroys the trust foundation of alliance marketing ecosystem. There are various means of alliance fraud, including but not limited to the following:  Cookie filling: fraudsters implant multiple attached cookies in the browser without the user's knowledge, so as to obtain false commissions. URL hijacking: By registering a domain name similar to that of a merchant, users are misled to enter the wrong URL, thus stealing traffic. SDK Forgery: In application installation, fraudsters produce false installation data by forging software development kit (SDK). Malicious adware: generating false traffic on user devices through malicious software, or forcing users to buy goods through specific links through "loyalty" software. The popularity of alliance fraud is rising. According to statistics, as much as 15% of the digital business income comes from the alliance marketing plan, and during the epidemic, this figure is even higher. 42% affiliate publishers reported a surge in site traffic, which provided fertile ground for fraud.  The influence of alliance fraud is manifold: Economic loss: merchants and alliance members suffer economic losses due to the payment of undeserved commissions. Reputation damage: Fraud may lead to brand reputation damage, and users' trust in affiliate marketing will decrease. Legal risk: With the improvement of anti-fraud laws, individuals and organizations involved in fraud may face legal sanctions. In order to meet these challenges, merchants and alliance members need to take a series of preventive measures, including carefully screening subsidiaries, closely monitoring traffic, preventing suspicious IP addresses, using fraud prevention platforms, clarifying communication and cooperation terms, regularly checking and updating strategies, educating subsidiaries and using technical tools. Through these measures, the risk of fraud in alliance marketing can be significantly reduced and the business can be protected from unnecessary losses. In alliance marketing, careful screening of affiliated companies is the first step to prevent fraud. According to the research, the fraud risk can be significantly reduced by implementing a multi-stage application process and requiring merchants to manually approve new subsidiaries. Regular monitoring of alliance marketing activities is very important to identify abnormal traffic and suspicious behavior. Identifying and stopping suspicious IP addresses is an effective means to prevent alliance fraud. Using professional fraud prevention platforms and services can help businesses to detect and prevent fraud activities more effectively.  Through the implementation of the above preventive strategies, merchants can greatly reduce the risk of fraud in alliance marketing and protect their business from unnecessary losses.