Affiliate marketing and paid online advertising (e.g. Google Ads or Facebook Ads) can significantly boost sales in an online store. Unfortunately, wherever sales commissions and advertising budgets are involved, fraudsters also appear. Commission fraud is a practice that involves manipulating affiliate or advertising systems to illegitimately obtain compensation for allegedly generated sales or conversions. In practice, this means that a dishonest partner or competitor tries to grab the commission or spend your budget without delivering any real value. Below, we explain how the most common fraud mechanisms work and how they affect your business. We then present effective methods to protect yourself against this practice.

The most common methods of affiliate and advertising fraud

Fraudsters use various techniques to steal commissions or illegitimate fees for clicks. Here are the most popular ones:

Click fraud – Generating fake clicks on ads or affiliate links to inflate campaign costs or force commission payouts. This can take the form of so-called click bombing by competitors (deliberately clicking your paid ads to drain your budget) or automated clicks by bots. In both cases, the advertiser pays for clicks that never translate into customers — resulting in financial losses and distorted campaign metrics. In affiliate marketing, there is also the phenomenon of last-click hijacking, which involves generating multiple clicks just before a user makes a purchase. The goal is to “jump” to the last position in attribution and claim the commission for the sale, even though the user arrived via another source. Such clicks can be generated manually or using bots.

Cookie stuffing – This technique consists of secretly placing an affiliate cookie in the user’s browser, even if the user did not intentionally click the partner’s link. As a result, when such a user later visits the store and makes a purchase, the system reads the cookie and credits the commission to the fraudster. Cookie stuffing can be done via invisible iframes, scripts, or pop-ups on seemingly harmless websites. In practice, the affiliate earns a commission for a customer they never actually referred — for advertising they did not truly provide.

Conversion manipulation (fake leads and transactions) – In CPL or CPA affiliate models, the fraudster can fake conversions. For example, a partner in a** Cost Per Lead** program might fill out lead forms with fake data or the data of unaware individuals to collect a commission for each sign-up. They may also generate fake transactions — for instance, purchasing from the store through their own affiliate link and then returning the product, hoping the commission is paid before the return is processed.

More advanced fraud includes using stolen credit cards for fake purchases, which lets the fraudster collect commissions while the store suffers chargeback losses.

In paid advertising, there can also be conversion pixel manipulation — the fraudster configures the tracking script to report fake sales or app installs. In all these scenarios, the marketer pays for conversions that never produce a real customer or profit.

Dishonest affiliate networks – Not only individual “partners” can commit fraud. Sometimes entire intermediary affiliate networks operate in questionable ways. This can mean allowing affiliates that generate low-quality traffic (e.g. spam, bot farms) or failing to enforce rules prohibiting such practices. There have even been cases where a network itself engaged in cookie stuffing or inserted its own affiliate ID to take part of the commission owed to publishers. Another issue is affiliate pyramids — a partner joins multiple networks simultaneously or creates multiple accounts to collect the commission several times for the same sale (so-called affiliate hopping).

Working with unverified, non-transparent networks increases the risk of fraud — scams most often occur in such unvetted programs that inexperienced advertisers fall for. This is why carefully selecting affiliate partners and networks is crucial.

Besides the above, there are other unethical tactics, such as brand bidding (partners bidding on your brand name in PPC ads, even though the rules forbid it, to capture traffic that would reach you anyway) or typosquatting (registering domains with misspellings of your brand name to redirect part of the traffic to their own site with affiliate links). All these methods lead to the same outcome: commission or ad costs are charged even though the fraudster has not delivered any real value in the form of new customers or sales.

The impact of fraud on budget and campaign effectiveness

Affiliate and ad fraud have very serious consequences for online stores and marketers:

Wasted advertising budget – Every fake click and fake conversion is money thrown away. Funds intended to drive sales end up in the hands of fraudsters. It is estimated that globally, 10% to even 20–25% of all online ad clicks are invalid. This translates to tens of billions of dollars in losses annually — according to Juniper Research, advertisers lost $84–88 billion to fake clicks in 2023. In some industries the problem is even worse (in the financial sector, up to half of the clicks may be fraudulent). This means that a significant portion of your PPC budget may be consumed by unprofitable traffic. In affiliate programs, losses are also significant — for example, in 2022 around 17% of affiliate traffic turned out to be fraudulent, costing advertisers around $3.4 billion globally.

In short, fraud directly reduces your return on investment (ROI) and can make campaigns unprofitable.

Distorted data and poor marketing decisions – Fake traffic and conversions significantly skew analytics. You get inflated numbers of clicks, leads or sales that bring no real value. Campaign performance may look good on paper while having negligible real impact on the business.

It becomes harder to assess which channels truly work and which only generate “noise.” You might think a given affiliate is performing well, while they are actually stealing commissions from others or bringing customers who would have bought anyway.

Such misleading data makes optimization difficult — you might wrongly allocate budget to sources that appear effective (according to reports) but do not generate real profit.

Additionally, the time and resources spent on analyzing and detecting these anomalies are hidden costs — time that could be spent improving campaigns is wasted on fighting fraud.

Loss of trust and reputational damage – If an affiliate program is full of abuse, your brand’s reputation can suffer. First, honest partners may lose motivation if they see others stealing their commissions — they may consider your program unreliable and stop promoting it. Second, some aggressive methods (like spam or intrusive ads impersonating your brand) may annoy customers. A consumer who falls victim to manipulation (e.g. gets redirected to a suspicious site or sees odd behavior after clicking an ad) may blame the brand. In extreme cases, when a fraud scandal breaks (for example, the well-known eBay affiliate commission fraud case a few years ago that ended in lawsuits), the company has to face a PR crisis.

In short — fraud harms not only sales numbers but also relationships with partners and customers.

How to protect yourself from commission fraud

Although completely eliminating fraud can be difficult (fraudsters constantly invent new ways to bypass security measures), there are many ways to reduce the scale of the problem and protect your business.

Here are the most important ones:

Monitoring anomalies – Regularly analyze data from your campaigns and affiliate program to detect suspicious patterns. Watch out for sudden spikes in traffic or conversions from a particular partner, unusual activity times (e.g. most “sales” occurring in the middle of the night), unnaturally high conversion rates from questionable sources, or recurring identical values (e.g. many orders for the exact same amount). Check if a new affiliate is generating hundreds of low-value conversions right away — this may signal fraud. Analyze traffic sources and the quality of acquired customers (e.g. do the leads show any activity at all, are buyers massively returning products) to identify issues faster. In Google Analytics and ad platforms, monitor metrics like average time on site and bounce rate — if traffic from a given channel has suspiciously uniform or extreme stats, it deserves a closer look. In short: treat results that look “too good to be true” with healthy skepticism and investigate their causes.

Filtering and validating traffic – Implement technical safeguards that filter out at least some suspicious traffic before it consumes your budget. On the PPC campaign level, you can restrict ad placements to vetted sites (e.g. exclude low-quality ad networks, suspicious mobile apps, websites known for spammy practices). Set a click limit per IP address or device — if a single user clicks an ad 10 times within a minute, it’s likely a bot and should be blocked. In affiliate programs, it’s worth validating leads/sales before paying commissions: e.g. manually approve leads (call a few randomly to verify), verify email addresses, use CAPTCHA in forms, and enforce a minimum cooldown period between the click and the sale (which makes last-click cookie hijacking harder).

Device fingerprint tracking is also a good idea — if hundreds of conversions come from the same device or browser, they can be rejected as duplicates. Finally, use IP and device blacklists known for fraud (many anti-fraud tools and marketing communities share such lists). While more sophisticated fraudsters can bypass these barriers (e.g. by rotating IPs, using VPNs and emulators), the goal is to make their job as hard as possible — most will move on to easier targets.

Fraud detection tools – Consider investing in specialized software or services that automatically detect and block suspicious traffic. Such tools usually rely on algorithms analyzing user behavior on your site and the technical parameters of clicks. For example, they can detect bots pretending to be human (by analyzing unusual mouse movements, lightning-fast clicks, lack of behavioral variability), click farms (hundreds of visits from the same region in a short time) or cookie stuffing mechanisms (abnormal cookie load sequences). If the system detects that a click is likely fake, it can block the landing page from loading or exclude the click from reporting and billing.

There are many solutions available — from PPC-specific tools (like ClickCease, Google Ads Invalid Click detector) to platforms that monitor affiliate programs for abuse. Worth mentioning are also Polish solutions, e.g. TrafficWatchdog (trafficwatchdog.pl), which offers monitoring of ad traffic, scanning clicks and leads for fraud, and automatically blocking suspicious sources. These kinds of platforms can relieve marketers by catching fraud in the background and protecting the budget in real time.

**However, not all tools are created equal **— before choosing one, review user feedback and performance (ideally test it if they offer a trial). A well-implemented anti-fraud tool is an extra security layer that, combined with your own monitoring, significantly improves your odds against fraudsters. Best practices in working with partners – The key to limiting affiliate fraud is preventing it at the organizational level of your program and partner selection. Start with a clear affiliate program policy that forbids actions such as: using your brand assets without consent, brand bidding on your brand name in paid ads, spamming users, cookie stuffing, generating artificial traffic, etc. The clearer the rules, the easier it will be to enforce them. Include clauses in partner agreements about traffic quality control — e.g. reserve the right to audit traffic sources delivered by the affiliate or to reject commissions for leads/sales deemed fraudulent. Vet new partners before approving them: check their track record (e.g. sites where they publish content, reviews from other advertisers).

Avoid shady affiliate networks promising “easy money” — they might be pyramid schemes or scams. It’s better to work with fewer vetted, reliable partners than with a mass of anonymous publishers of unknown background.

Also set reasonable compensation models — for example, in the case of expensive products consider a hybrid payment model (lower commission for a lead, with a bonus after a real sale once the return period passes). This reduces the temptation to cheat. Communicate regularly with partners: inform them that you actively monitor traffic quality and that any fraud attempts will result in removal from the program (and possibly legal consequences if serious losses occur). Clear rules and consistent enforcement will build the image of a program that’s not worth trying to cheat.

Summary

Fraud in affiliate marketing and PPC advertising is a real threat that every online store owner and marketer buying traffic must take into account.

Commission fraud mechanisms — from fake clicks to cookie stuffing to bogus conversions — can drain budgets and distort campaign results.

Fortunately, by knowing the typical methods fraudsters use, we can implement the right countermeasures. The key is awareness and a proactive approach: continuously monitoring campaign performance, filtering traffic, and verifying partners.

Don’t hesitate to use modern fraud detection tools — such as the mentioned TrafficWatchdog or other click scanners — which provide valuable support in protecting your campaigns. By combining good practices with technology, you can significantly reduce fraud, protecting both your revenue and relationships with honest partners.

As a result, your marketing efforts will be more transparent, effective, and profitable — and you will be able to focus on what matters most: acquiring real customers and growing your business, instead of putting out fires caused by fraudsters.