Klein Online (& Out-of-Line): Kick Fraud Out!

Peter Klein
by Peter Klein
July 27, 2011

The mThink/Revenue Performance team were kind enough to offer me an outlet for my opinionated self and perhaps also provide a nugget or two of value.  Those who know me understand that I am rarely bashful or quiet, but that said, allow me to bring to you Klein Online.

I’d like to throw some thoughts out there on fraud.

What’s the biggest single threat to us these days?  Al Qaeda?  Libya?  Cuba?  Illegal immigrants?   Nope.
It’s the fraud that is running rampant in the online marketing industry.  There are several causes: there’s a really low barrier to entry for new networks; compliance isn’t as strong as it needs to be;  and perhaps the biggest problem of all is the activities of foreign fraud cells.


These days absolutely anyone can start up a network and begin brokering offers.  In fact, I’m pretty sure my mom could start an affiliate network tomorrow, and it took her four months to hook up her new plug-and-play Dell desktop PC.  This is a problem in itself, but it has a knock-on effect in that the majority of smaller networks offer little added value.

Much of the time they have poor compliance and broker deals that are so far removed from the original source it is impossible to track down the poor quality traffic. So pass along deals at your own risk. but make sure that you treat them the same way as you would as the originating source.

Foreign fraud is an even worse problem.  Fraudsters in India and China have actually begun paying Americans to pose as affiliates. These fraudulent applicants can sound great and well-versed on the phone – only for fraud to start pouring in once their applications are approved (see: Trojan Horse).

Often, we find that fraudulent applicants use false documentation when we ask for references. One favorite is the collegiate special of a fake ID.  Check out this license from a gentleman by the name of Mark Smiley – who resides in the State of South Carlonia.

mark smiley carlonia

I’ve visited most of the 50 states, from New York to California, Vermont to Florida, and Texas to South Dakota – but somehow I missed the state of South Carlonia in my 30-something years of domestic travel.

For all of us interested in the future of the industry, the only way to end these problems and stop wasting our precious resources is to go to the root of the problem and eliminate unsolicited applications.

Keep the garbage out!
Oh, and by the way, I categorically deny that I have ever taken performance marketing enhancing drugs. :-)

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Peter Klein

About Peter Klein

Peter Klein is President and co-founder of Admediary, a full-service online performance marketing company. He has 20 years of online and offline marketing experience. Most recently he was the SVP of Media for MediaWhiz, where he was responsible for the creation and growth of multiple performance marketing divisions, including the consistently top 5 ranked Blue Book affiliate network, MonetizeIt. Prior to joining MediaWhiz, Peter was GM of Affiliate Marketing for HotRocket Marketing, where he developed and launched the RocketProfit.com affiliate network and was responsible for all event planning. Before RocketProfit.com, Peter held both traditional and online marketing positions at companies such as Cablevision, Barnes & Noble, and Publishers Clearing House. Peter holds a BS in Business Management and Marketing from Cornell University.

View all posts by Peter Klein

5 Responses to “Klein Online (& Out-of-Line): Kick Fraud Out!”

  1. stgelais Says:

    Excellent article.

    I too have received some interesting driver’s licenses. Got one once from a female which had a man’s picture on it.

    Our system controls fraud at the application level, and then continuously thereafter. We have gotten better at recognizing and ferreting out fraudulent affiliates, but it is a constant battle I typically compare to the battle between anti-virus software and hackers that create viruses. The fraudsters keep getting better at it.

  2. FionnaM Says:

    Some of us are not aware of fraudulent issues in our society nowadays. However, I just want also to share a story which somehow related to your post! You can check this out here: FTC charges marketer with fraudulent practices. The Federal Trade Commission (FTC) has submitted a complaint against an online marketer for apparently debiting consumers’ bank accounts without their permission. As reported by the charges, customers’ accounts were charged for products they did not request when they visited one of the corporation’s website in search of a cash advance.

  3. Hitcliff J. Says:

    In this era of phishing and other fraudulent cybercriminal activities; we need all the help we can get to educate ourselves on how to “sniff out” and avoid frauds. Personally I’m strongly convinced that first of all, educated means alarmed. I recommend reading books like Warning! Internet Cheaters to learn the basics. Moreover, in response to this need, the U.S. Federal Bureau of Investigation (FBI) has several great websites filled with tons of information to keep the general public safe from fraudulent activities. If you don’t protect yourself, no one will.

  4. inter4522 Says:

    There is definitely so much fraud out there. You have to be very careful with it. You cannot trust everybody out there online. You need to do your homework. 

  5. titulado Says:

    Good point Peter. It is really newly impossible to track down traffics that are in poor quality. MLM Traffic Formula thinks that fraudsters are everywhere! Fake IDs are being shown as a proof that they are trusted affiliates. Keep an eye on this everyone.