Criminals killed my affiliate program! Please help!

[tonyx]

Criminals killed my affiliate program! Please help!

I opened an affiliate program for my commercial website in 2000, which I ran and managed myself using the Ultimate Affiliate script. I differentiated my affiliate program by offering nearly instant electronic payouts of commissions using e-gold to all my affiliates.

At first the affiliate program was a great success. Signups increased tremendously, my legitimate affiliates brought in a lot of new subscriptions and were happy with their nearly instant payouts of commissions.

But then somewhere around 2001-2002 trouble emerged. My affiliate program was discovered by criminals from Vietnam, the Philippines and other third world countries. They started using stolen credit card information to generate lots of signups and then requested their commissions from those fraudulent signups. I was swamped. I no longer knew which signups and commissions were legitimate and which were fraudulent. It also turned out that my chosen credit card processors at the time were unable to screen for fraud (contrary to what they promised when I signed up with them) and were happy to accept all those fraudulent credit card payments.

As a consequence, I lost thousands of dollars in commissions I paid to criminals, I lost thousands of dollars in chargebacks and fines I later had to pay for all those fraudulent signups my credit card processors were unable to screen for, I lost thousands of dollar for sales that never took place, I lost my accounts with those credit card processors, not to mention all the lost earnings for lots of downtime when I lost my accounts and losing all my legitimate affiliates, when I finally had to close down the affiliate program.

However, my site and product is still going strong. For a couple of years now it has been accumulating signups and strong sales without any kind of advertising or affiliate referrals at all. I am still being asked by my former and hopeful new affiliates if I have plans to reopen the affiliate program. I would very much like to, since my membership website is excellent and I'm sure the commissions would benefit any potential affiliate.

But I no longer wish to deal with the head-ache of being overrun by criminals. I understand that the root of the problem may have been my promise of instant payouts in e-gold, but even if I eliminate that, who's to say that criminals still won't use fraudulent signups and then wait for their checks? My current credit card processor has excellent fraud screening, but since I no longer offer the instant payout affiliate program, it hasn't been tested against too many fraudulent signups.

Neither do I really want to be personally writing out checks. I wish for the affiliate commissions to be somehow distributed automatically by a third party. Unfortunately my current credit card processor does not offer an affiliate program.

In my mind, this would be my ideal affiliate program. A third-party company - let's call it "Affiliate Master" - deals with everything related to being an affiliate to my site. I direct potential affiliates to Affiliate Master, who then gives them all the data and links to promote my site and hopefully also makes some sort of a background check. I also integrate necessary scripts with the signup systems on my website, so that when a purchase is made, then data is sent to Affiliate Master about what kind of sale was made, who was the referring affiliate and how much is the commission.

Then I pre-pay Affiliate Master for example $1000, which it then will start distributing to all my affiliates according to what sales they bring to my site minus their own fee. Once the money runs out, I need to send them some more money etc. Also, if a sale results in a chargeback or refund, the data is then sent to Affiliate Master and the affiliate who originally got the commission for it will have his commission deleted for that sale. An affiliate with too many refunds or chargebacks will be deleted immediately.

I have absolutely no idea though, if such a possibility exists today. Are there programs/companies like that? If so, which ones would you recommend? If there are no such companies, what would you advise me to do? Or where could I find more information about this? I still want to reopen an affiliate program to my site, but I no longer want the associated head-ache.

Respectfully,

tonyx

 

[Refrozen]

To be honest, you should do what many web-hosts and other web-based programs do; simply block access from these little, high-fraud countries.

It seems backwards for dealing with racism, and globalization of the internet, but the unfortunately part is; the governments of these countries don't care enough to prevent this.

I'd be willing to bet most of the traffic from these countries is actually from 1st world countries, but going through proxies in the countires.


There's plenty of things you can do to decrease fraud, flag bad creditcard numbers, put a 1-2 week delay on payment so you can tab through all the sales by one affiliate (checking things such as IP addresses, locations, credit card numbers and providers, etc for anything suspicious), etc.

 

[SpareDomains]

Check out cj.com or linkshare.com as these companies would track your sales and pay your affiliates eliminating work on yourself or simply get rid of instant payments which will always bring in fraud I would assume.

 

[armstrong]

I'm from the Philippines. I'm sorry to hear about your problems, and how some of my countrymen may be involved.

In fairness, fraud happens everywhere; your site just happened to be targetted by a syndicate operating from the third world. In contrast to your experience, most of my sites' chargebacks come from first world countries, primarily the USA, Canada, and UK. Probably due to the fact that that's where my marketing is targetted.

In the future, it would be best if you can find an affiliate program that has a relatively long hold prior to payout. The way you had it setup, with near-instant affiliate payouts, is simply too attractive for credit card fraudsters to pass up.

 

[pelican]

As mention above, try Commission Junction (www.cj.com)
Personally i havent try it yet, but cj should be reputable enough and should have prevention to those fraud signup.

They seems to be what you want.
- you prepay cj
- affiliates will sell / refer your products through cj
- cj make payment to those affiliates

 

[RJ]

Have you looked into clickbank.com as an option? It's pretty much an automated system setup for affiliate programs.

 

[singx]

Try www.cj.com if it suits your needs,
otherwise clickbank.com & shareasale.com

Pity on those people, bring dis-repute to the whole nation for small gains...

 

[tonyx]

thanks for the replies! I do not plan to restrict access from any countries, even if it would decrease fraud, since I myself live in a country of the former soviet union and have had a lot of legitimate customers from the countries usually restricted by such measures. however I obviously can no longer offer instant payouts to my affiliates. at the time I thought it was a great way to differentiate my affiliate program from the competition, all my legitimate affiliates loved it as well and it would still be perfect - if there was no fraud in the world. unfortunately there is and always will be, so those of us seeking to run a legitimate business will have to find ways to continue running them, even if it means cutting down on services and advantages.

I will look into the companies mentioned here to see if they can take over the affiliate management side of my business. thanks again for all your replies!

 

[labrocca]

I ran a pretty successful affiliate program at shareasale.com They are MUCH cheaper than CJ and do pretty well.

The reason you got ripped off so badly was the instant payout. Most aff programs take 30-90 days before payouts.

 

[iNod]

I'm from the Philippines. I'm sorry to hear about your problems, and how some of my countrymen may be involved.

In fairness, fraud happens everywhere; your site just happened to be targetted by a syndicate operating from the third world. In contrast to your experience, most of my sites' chargebacks come from first world countries, primarily the USA, Canada, and UK. Probably due to the fact that that's where my marketing is targetted.

In the future, it would be best if you can find an affiliate program that has a relatively long hold prior to payout. The way you had it setup, with near-instant affiliate payouts, is simply too attractive for credit card fraudsters to pass up.

Canada? I have never heard of a Canadian Fraudster.. Not that we don't.. Just we are too laided back and dumb to do it. (Major generalization here LOL)

I am sorry to here about that. Since your cc processor doesn't do Fraud Screening you are going to have to do it yourself.. Which is going to take time. That is why many affiliate programs have more than one staff member just screening the transactions. it may be time worthly and costly but you will get actual money in the end.

- Steve