Affiliate marketing can be a powerful way to grow your business, drive sales, and reward partners for their contributions. But like any open system, it’s also a ripe target for malicious actors. If left unchecked, fraudsters can exploit your program, drain your revenue, damage your brand reputation, and even get your business flagged by payment processors or banks.
One of the most common (and dangerous) threats is affiliate fraud through stolen credit cards. Let’s break down how it works, why it’s so damaging, and what you can do to protect your company.
How Affiliate Marketing Scams Work
The attack is deceptively simple:
- Sign up for your affiliate scheme. Fraudsters create an account in your affiliate program, often using fake details and throwaway emails.
- Steal someone’s credit card details. Using data from breaches, phishing, or the dark web, they get access to stolen credit cards.
- Make purchases through their own affiliate link. The scammer uses the stolen card to place orders on your site, but ensures they go through their affiliate link so they’ll earn commission.
- Scale it with automation. With bots and automated software, they repeat this process at scale hundreds or thousands of fake orders, each one funneling affiliate payouts to the scammer. Bot traffic is often used to automate and scale these fraudulent activities. Scammers may also engage in generating fake leads as part of their fraudulent tactics.
At first glance, your system sees this as legitimate revenue. The fraudster is generating sales, so commissions get tallied. But soon the chargebacks roll in.
The Real Costs of Affiliate Marketing Fraud
This isn’t just about a few bad transactions. The costs can spiral:
Affiliate Payouts to Scammers
You’re paying real money to fraudsters for “sales” that never stick. Even if the orders are later reversed, the commission is often gone.
Chargeback Fees
Every fraudulent charge leads to a chargeback and each chargeback can cost you $20–$100 in fees, depending on your payment processor.
Reputation Damage
A high chargeback rate can get your merchant account flagged. Too many and you risk being labeled “high risk” or even losing your ability to accept credit cards. Digital ad fraud can further damage your brand’s reputation and drive up your advertising costs, as fraudulent activity inflates campaign spend and undermines trust in your marketing efforts.
Operational Headaches
Fraudulent orders mean wasted shipping costs (if goods are sent), wasted support time, and increased scrutiny from payment networks.
Customer Trust Issues
Victims of card theft often associate the fraud with your company, even if you weren’t the source of the breach. That can lead to bad reviews, lost trust, and reputational harm.
All these issues contribute to a higher overall fraud risk for your business, making it essential to monitor transactions and affiliate activities closely.
Why Affiliate Programs Are Targeted
Fraudsters love affiliate schemes because they provide direct monetary incentives.
Instead of just buying goods with stolen cards (a crime that requires reselling physical items), scammers get instant digital payouts. Affiliate commissions are clean, traceable, and deposited directly into bank or PayPal accounts making them feel like “easy money.”
Many companies don’t closely audit affiliate activity, especially smaller businesses that see affiliate marketing as a “set and forget” growth channel. This lack of oversight allows unethical practices to go undetected, making it easier for scammers to exploit the system.
To avoid falling victim to scams, it is crucial to partner with a legitimate affiliate program that is transparent, trustworthy, and clear about its terms.
Red Flags to Watch For
If you run an affiliate program, here are signs that something might be off:
- Unusually high order volume from a new affiliate.
- Low-quality traffic with no genuine engagement, just clicks and orders.
- Orders clustered in suspicious patterns (e.g., many purchases within minutes).
- High percentage of chargebacks linked to one affiliate’s orders.
- Mismatch between traffic sources and conversions (e.g., no visits but lots of sales).
- Multiple accounts with similar details (emails, IP addresses, payout info).
- Lack of verifiable contact details or physical address for the affiliate.
Other Common Tactics Scammers Use
Beyond the basic credit card scam, malicious affiliates may use:
- Cookie Stuffing: Injecting affiliate cookies without user consent, so they get credit for sales they didn’t generate.
- Fake Leads: Filling out forms with bots to trigger CPA (cost-per-action) payouts.
- Click Farms: Using cheap labor or bots to simulate traffic.
- Brand Bidding: Hijacking your own brand name in ads to divert legitimate sales into their affiliate links.
- Click Fraud: Using bots or deceptive means to generate fake clicks and inflate advertising costs.
- Fake Website: Creating counterfeit sites that mimic your brand to divert traffic and deceive users.
- Redirect Traffic: Cloning pages and redirecting visitors to fraudulent sites to earn illegitimate commissions.
- Scammers Create Fake Ads: Designing ads that mimic your brand to hijack traffic and generate fraudulent sales.
- Targeting Branded Keywords: Bidding on your company’s branded keywords in ads to mislead consumers and hijack direct traffic.
- Multiple Ads: The presence of numerous ads on a site can indicate low-quality or fraudulent marketing practices.
But stolen credit card scams are uniquely damaging because they create direct financial liability for your business.
How to Protect Your Affiliate Program
Stopping this kind of fraud requires layered defences. Monitoring affiliate traffic is crucial to detect suspicious patterns, such as click spam or spoof traffic, and prevent fraudulent activities that can distort your data and cause financial losses. Here are some best practices:
Stay vigilant and follow these best practices to avoid scams and protect your affiliate program.
1. Vet Affiliates Before Approving
Don’t automatically approve every signup. Require details like website URLs, traffic sources, and business information. Manually review affiliates who look suspicious.
2. Monitor Order Patterns
Set up fraud detection rules:
- Multiple orders from the same IP in a short time
- Mismatched billing and shipping addresses
- Orders just below thresholds for extra scrutiny
Use fraud detection software or your payment processor’s built-in tools.
Additionally, regularly review search engine results and the search engine results page (SERP) to monitor for suspicious ads or affiliate activity that could indicate digital ad fraud.
3. Delay Affiliate Payouts
Instead of instant or weekly payouts, hold commissions for 30–60 days. This gives time to identify fake transactions and detect fake click activity, helping to prevent fraudulent affiliate commissions. This gives time for chargebacks or fraud reports to surface before paying out.
4. Track Chargebacks by Affiliate
Always map chargebacks back to the affiliate responsible. Tracking chargebacks can help identify fraudulent affiliates and allows you to monitor affiliate’s actions for suspicious or malicious behavior. If a pattern emerges, suspend or ban that account immediately.
5. Limit Automation Abuse
Use CAPTCHA, bot detection tools, and rate limiting on your checkout process to stop mass automated attacks.
Additionally, monitor for bot traffic and fraudulent activity originating from mobile apps, as scammers often use mobile apps or malware-infected devices to generate fake clicks and inflate metrics.
6. Communicate With Affiliates
Legitimate affiliates will appreciate a program that fights fraud, because it protects the value of their partnership. Educate your affiliates on how to identify a legitimate affiliate program and avoid falling for a marketing scam by providing clear guidelines and transparent information. Make your anti-fraud policy clear in your terms.
Warn your affiliates about get rich quick schemes, as these deceptive tactics can lead to financial loss and damage your program’s reputation.
7. Work With Your Processor
If you suspect organized fraud, notify your payment processor. They may provide extra fraud prevention tools or guidance. Stripe for example has “Stripe Radar” a machine-learning powered fraud detection system. It evaluates thousands of signals such as device fingerprinting, IP reputation, billing vs. shipping mismatches, early dispute warnings, and more to assign a risk score to each transaction. Device fingerprinting can analyze the user’s computer to help prevent fraud by identifying suspicious patterns or devices.
Best Practices for Affiliate Marketers
Building a successful affiliate marketing business requires more than just signing up for affiliate programs and sharing links. To thrive in the affiliate marketing industry, affiliate marketers must prioritize transparency, honesty, and ethical practices at every step.
Start by partnering only with reputable companies and legitimate affiliate programs. Always disclose your affiliate relationship to your audience transparency builds trust and helps you avoid the pitfalls of marketing scams. Avoid deceptive tactics such as fake ads, fake leads, and cookie stuffing, as these not only harm your reputation but can also result in financial losses for businesses and jeopardize your standing with affiliate partners.
Stay informed about common affiliate marketing scams, including google ad hijacking, url hijacking, and transaction fraud. Proactively monitor your website traffic using tools like Google Analytics to spot unusual patterns, such as spoof traffic or fake clicks, which may indicate potential scams. Be wary of fake influencers and fake product scams only promote products or services you have personally vetted and can genuinely recommend.
Leverage social media platforms to reach new audiences, but remain cautious of fake accounts and fraudulent activities. Use affiliate networks like ShareASale or CJ Affiliate to connect with reputable companies and access a wide range of legitimate affiliate programs. Regularly review your affiliate program’s terms and conditions, and establish a clear anti-fraud policy to guide your actions and protect your business.
By following these best practices, affiliate marketers can prevent affiliate fraud, build credibility, and create a sustainable business that benefits both themselves and their partners. The affiliate marketing landscape is always evolving, so it’s essential to stay up-to-date with industry trends and continually adapt your strategies. Whether you’re new to affiliate marketing or a seasoned pro, prioritizing transparency, fairness, and ongoing fraud prevention will help you avoid affiliate marketing scams and achieve long-term success in the industry.
Final Thoughts
Affiliate schemes can supercharge growth, but they can also attract malicious actors looking for easy money. Credit card fraud through affiliate links is one of the most damaging scams because it combines direct theft with reputational damage. Be wary of any affiliate or investment opportunity that requires an upfront fee, as this is often a red flag for scams.
Companies that run affiliate programs need to recognize this risk and implement safeguards. The cost of prevention vetting affiliates, adding fraud checks, delaying payouts is tiny compared to the cost of unchecked fraud. Monitoring activity on the advertiser’s site is also crucial for detecting fraudulent behavior such as cookie stuffing.
By tightening signups, monitoring activity, and delaying payouts, you can dramatically reduce your exposure to affiliate fraud while keeping your program attractive to legitimate partners. Use fraud detection tools to identify fake leads and protect your program from suspicious activity.
At the end of the day, affiliate marketing works best when it’s built on trust. Protecting your business, your customers, and your affiliates from fraud ensures your program is a true growth engine, not a liability. Make sure to safeguard future purchases from cookie stuffing and other long-term fraud tactics.