Affiliate Marketing

How Financial Marketers Can Prevent Affiliate Fraud

Yvette Edsall

COO

Last Updated: February 13, 2025

Unexpected traffic spikes that a product launch, campaign or marketing event can’t explain.
Regional traffic surges that outpace what you expect from potential customers in a given area.
Multiple conversions with the same tracking ID.
Surging affiliate performance with partners that previously didn’t perform well.

If you’re in a highly regulated industry like financial services, you may be worried not only about possible affiliate fraud but also compliance repercussions from misrepresentations of your brand and products, and even from well-meaning affiliates who aren’t familiar with financial regulations.

Proactively monitoring and managing affiliates who may be knowingly or unknowingly engaging in fraudulent activity will give you the confidence to scale your affiliate channel with less risk.

As an all-in-one affiliate marketing agency, network and compliance tool specializing in financial services, Fintel Connect understands best practices for financial institutions, Banking as a Service (BaaS) providers, and fintechs. For over 20+ years, we’ve been helping firms in highly regulated industries scale their affiliate programs while safeguarding themselves against fraud, maintaining compliance and protecting their reputations.

In this article, we’ll cover:

Are you a financial services company looking to scale your affiliate marketing channel while also mitigating fraud risk? Discover how Fintel Connect can help. Contact us today.

How does affiliate fraud happen?

Affiliate fraud happens when affiliates generate poor-quality traffic and leads from fraudulent means, like fake clicks or accounts.

Firms then pay commission on these leads because, at first glance, it seems like an affiliate has met the agreed targets.

However, fraudulent affiliates may not operate in the same way and not all affiliate fraud may be intentional. Here are some of the most common scenarios of how fraud can occur among your affiliates:

Bad actors with technical know-how. They pretend to own websites, or use automated tactics to inflate click numbers and engage in fraudulent “lead” activity on legitimate pages.
Illegitimate affiliates who engage you or your partners with an affiliate agreement for a legitimate website. They then produce artificially high numbers or extremely low-quality leads through dishonest tactics (more on this below).
Non-compliance from legitimate affiliates that can mislead potential customers, resulting in poor leads. Non-compliance can occur for a variety of reasons, including genuine human error, poor vetting of sub-affiliates, and lack of knowledge around compliance and financial industry standards.

When in doubt, if something looks off or a team member or one of your affiliate partners flags suspicious behaviour, follow up and investigate.

Want to learn more about the different ways fraud happens and how it can affect compliance? Read Affiliate Marketing Compliance For Fintechs & Banks: A How-To Guide.

How to prevent affiliate fraud in financial services

Affiliate fraud puts financial services firms at risk not only of overpaying for fake leads but also for reputational damage, loss of trust between you and your publishers, and even potential scrutiny from regulators if fraudsters misrepresent your brand.

Being proactive is the best way to mitigate fraud. In our two decades of experience in the affiliate space, we have found the following four pillars to be a strong fraud-prevention workflow.

1. Know the different types of affiliate fraud in financial services

In 2022, a cyber security study revealed that 17% of affiliate traffic was fake.¹ And a more recent study predicts significant growth of artificially inflated traffic in 2024, with potential losses for advertisers of $71 billion.²

With affiliate fraud on the rise, it’s important to know the different types of fraudulent behaviour so you can more easily detect it in your financial affiliate programs. Here are seven common ways scammers as well as legitimate affiliate partners commit fraud in financial services:

Click spoofing. Bad actors among your affiliate partners simulate clicks on your affiliate links. They do this by setting up click-tracking events on any activity on their website, not just on their affiliate link, to inflate the numbers.
Cookie stuffing. Fraudulent affiliates place tracking cookies on a user’s device without their knowledge. This tricks the system into crediting the affiliate for sales they didn’t generate, creating unearned commissions.
Click fraud and bots. Affiliates may continually click on their affiliate links to earn a payout without generating genuine leads. Sometimes they use bots to do this, which can create more sophisticated chains of action to seem like real users.
URL hijacking. Fraudsters can “hijack” (i.e., intercept or alter) an affiliate link’s URL via malware or compromised websites to steal affiliate commissions from a valid publisher.
Sneaky redirects: Scammers may set up URLs with domains that are very similar to a valid affiliate’s website. The scammers immediately redirect potential customers to the real site once they click on the altered link. This allows them to claim credit where none is due.
Using stolen data: Some fraudsters may go beyond fraudulent clicks to actually open accounts using stolen personal information gathered from data breaches or identity theft.
Posing as a good affiliate: Some bad actors may duplicate legitimate publishers’ websites and pose as a good affiliate, although they are not capable of delivering actual results.
Sub-affiliates: Some affiliates may use a network of sub-affiliates to place your campaign content and ads. While not every sub-affiliate is unethical, the lack of transparency regarding the sub-affiliates a publisher collaborates with can make it difficult to identify potential fraud. Some sub-affiliates can also be damaging to your brand as they may be sites you would not choose to advertise on.

2. Develop a Clear, Comprehensive TOS

The TOS should be both clear and comprehensive. While clarity can be subjective, you want your TOS written in simple language, not legalese. Aim for an 8^th-grader level and explicitly define what affiliates are and are not allowed to do. The goal is to prevent ethical affiliates from unknowingly violating the rules, and unethical affiliates from claiming ignorance when they do.

Comprehensiveness can also vary by company, industry and program. But at minimum, your TOS should cover three main areas:

Legal compliance

Financial services marketing is highly regulated, and your affiliates need to be informed of all the relevant laws in your specific industry and jurisdiction. Also consider the general legal requirements that apply to most affiliates, such as:

Regulatory and consumer protection compliance for affiliates engaging in email marketing, including CAN-SPAM, CASL and GDPR
Relationship disclosure for affiliates who are writing or publishing reviews of your products
Limitations on provision of financial advice by unlicensed affiliates

One especially important issue to include is the use of incentive marketing programs, where affiliates provide various financial and non-financial rewards to customers who sign up for your products. In many consumer finance markets, such practices can lead to legal complications. Financial marketers should establish a clear policy on such affiliate marketing programs and describe it in their TOS.

Reputational safeguards

Most TOS agreements include a generic clause that allows merchants to stop any affiliate activity deemed harmful to their brand. This provides broad protection against unexpected forms of reputational risk, which is essential in the constantly evolving field of affiliate marketing.

Many companies also include prohibitions on specific types of affiliate content, such as hate speech and adult content.

Branded keywords

Require your affiliates to include your brand terms as negative keywords when bidding on PPC campaigns. This will prevent competition between your own internal marketing and that of your affiliates.

Additionally, affiliates should not be allowed to use your branded or trademarked terms in domains, subdomains, or user accounts. Not only is this misleading for customers, you may also risk forfeiting your exclusive rights to those names online.

3. Monitor Affiliate Activity

Onboarding your affiliates is the first essential step to success. Following up with ongoing performance monitoring is critical for your affiliates to continuously deliver legitimate results over the course of the partnership.

Detecting fraud is sometimes more art than science, but there are a few red flags to watch out for:

Abnormally high conversions. If your average affiliate conversion rate is 3%, but one affiliate is regularly converting at 10%, that may be a sign of trademark bidding.
Abnormally low conversions. This might indicate misleading advertising which results in low engagement. Or it could be that the affiliate is “cookie-stuffing”, where an affiliate generates a large volume of fake traffic to boost their site’s metrics.
Rapid changes in performance. If an affiliate that has been delivering ten sales a month suddenly jumps to a hundred, it’s worth taking a closer look. Event-driven spikes are sometimes possible, but are considered a rarity that normally isn’t sustained.

In addition to these red flags, your performance marketing team should also possess expertise in the technical side of affiliate fraud detection. Regularly conducting IP checks and email root checks on your affiliate referrals is a great way to unearth fraudulent behavior. (Not sure of how to do this? Your performance marketing team should be able to.)

4. Work With A Reputable Affiliate Network

While these methods can go a long way in preventing affiliate fraud, doing it effectively and consistently takes time and resources. It may require hiring, training and managing a dedicated in-house fraud prevention team.

To offset the weight of these costs, an affiliate network can do the heavy lifting for you. When you work with a reputable affiliate network, the network can provide your firm with:

Protection of default TOS, customizable to your needs
Access to a network of pre-vetted, qualified affiliates
A dynamic dashboard of analytics and reporting to monitor affiliate activity eaily
In-house expertise to combat the constantly evolving tactics of technical fraud

How Fintel Connect helps you prevent & detect financial affiliate fraud

With our 20+ years of performance marketing experience for highly regulated industries, we knew that combating fraud would be a key concern for financial services companies. So we addressed fraud prevention as we built our affiliate marketing solution for financial services firms. Here are three of the ways Fintel Connect helps you prevent and mitigate fraud.

1. Access a vetted, high-quality network of partners to prevent affiliate fraud

Sifting through potential affiliates to find legitimate partners is time-intensive work, especially when there are fraudulent actors posing as good opportunities.

Our team has vetted each of the 5,000+ partners in Fintel Connect’s network to ensure high-quality standards for financial services firms. Each of the affiliate partners in our network has met rigorous technical and content requirements, such as having a legitimate email address domain that matches their website.

Because we put in guardrails for publisher legitimacy, Fintel Connect reduces the chances of partnering with a fraudulent or unethical publisher.

affiliate fraud prevention — *Inviting vetted publishers through Fintel Connect’s network*

And by ensuring each publisher in our network is a good fit for financial services, your team will spend less time vetting and discarding illegitimate publishers or misaligned partners. You’ll also be more likely to find publishers who are aware of and ready to meet compliance requirements for financial services marketing.

2. Protect your brand with a default TOS you can customize

We can help you govern the relationship between your company and affiliates, with a default TOS you can customize based on your unique business needs.

We crafted an easy-to-read TOS so all affiliates can understand the terms. It covers acceptable behavior, rules, and conditions on a legal, compliance, reputational and branded level that affiliates must follow to participate in the program.

Our TOS includes:

Legally vetted default terms that cover critical issues, like commission structures, prohibited actions (e.g., branded keyword bidding), compliance, and privacy requirements.
Customizable Terms. You can add stricter rules or specific conditions to align with your business model.
Enforcement and Monitoring. We can manage and enforce the TOS for you. If affiliates violate the terms, we can takes action on your behalf—penalizing or removing the affiliate from the program.

With Fintel Connect, you’ll have a safety net of standard protections you can tailor to ensure legal and operational compliance, saving you the burden of creating and enforcing these terms yourself.

3. Use specialized analytics and reporting to alert you to irregular affiliate activity

Monitoring your affiliate campaigns closely is necessary for combating fraud, but takes a lot of time for your marketing and compliance teams to do. The time cost increases when marketing and compliance teams do not centralize information on campaign and publisher information.

At Fintel Connect, we designed our software to be a monitoring hub for both campaign performance and compliance. Your teams will spend less time and energy tracking metrics and be quicker to spot irregular activity because it’s all on a central dashboard.

Fintel check report can help with affiliate fraud detection and prevention — *The Fintel Check dashboard*

Your Fintel Check dashboard is where you can monitor domains where you have tracking links. If you are running your affiliate marketing through Fintel Connect, your tracking links will automatically appear as monitored in our system. If you are a BaaS provider, you can manually add URLs once to automatically monitor them from then on.

In Fintel Check, you’ll see flags for potentially non-compliant material, which doesn’t meet the rules you set. And our Link Manager report surfaces domains with publisher accounts you may or may not know about, pulled together for you automatically.

You also get visibility into click-level data with Fintel Connect. This helps your team investigate anomalies and surface potential misuse. Each click of a Fintel affiliate campaign link creates a ClickID, which contains campaign and publisher data, so you can investigate traffic and behaviour. You can use click-level data to better understand your campaigns and to detect potential fraud.

4. Get in-house expertise to help you stay up to date on the ever-changing fraud landscape

Our team at Fintel Connect is an expert in affiliate marketing for financial services. This includes staying up to date with the best ways to combat fraud, monitoring new affiliate scams and flagging anything unusual in our clients’ and partners’ performance data.

With Fintel Connect, you will find a true marketing partner who provides in-depth support and campaign-level strategy and guidance. We also maintain deep relationships with the affiliates in our network and help you build fruitful, long-lasting relationships with trusted partners.

Even with strong affiliate fraud prevention, you still may find suspicious activity in your affiliate marketing, whether intentional or accidental. With Fintel, you have a dedicated support so you can always get help understanding a spike in clicks or drilling into audience data to make sure your program is running smoothly.

For example, our team noticed a spike in traffic from one of our publishers. Through our affiliate tracking software, we quickly traced the source and uncovered a bot which a legitimate publisher had inadvertently picked up in their affiliate ad campaign. Knowing the signs and being proactive meant that we could step in before the problem snowballed.

You can easily monitor traffic and clicks with Fintel Connect’s tracking software to spot anomalies and rely on our team for fraud prevention help

Prevent financial affiliate fraud with Fintel Connect

While you can’t eliminate bad actors, you can stay on top of detecting and preventing fraud.

As a full-service affiliate platform, network and marketing partner to financial services firms, Fintel Connect commits to vetting potential publishers to reduce the risk of engaging with a fraudulent actor, and to providing the tools you need to catch fraud.

Sources:

https://www.marketingtechnews.net/news/bot-clicks-and-fake-traffic-set-to-cost-advertisers-over-71bn-59bn-in-2024-amid-budget-cuts/#:~:text=With%20ad%20spend%20growth%20slowing,increase%20of%2033%25%20from%202022
https://www.prnewswire.com/news-releases/affiliate-marketing-fraud-now-a-3-4-billion-problem-new-study-finds-301558180.html

Blog