Hey attention grabbing headlines. Love them or hate them you’re reading this are you not 😉 Well first of all cash-back site owners take a deep breath, I am not about to expose any of you as crooks, instead I felt it was about time I highlighted an ever increasing problem that has been generated by cash-back sites all be it un-wittingly but if corrective action is not taken could find more doors closing for cash-back sites.
I have been noticing for some time now the worrying trend of fraudster users on cash-back sites using the cash-back site as a mean to defraud merchants, normally they target leads based sites as that’s an easy way to get money if the networks/merchants are not monitoring for such fraud.
The reason these people have for the most part stopped going and doing this fraud direct via networks is simply because they standout like a sore thumb as the majority of their transactions are easily spotted, however go and do the same thing via a cash-back site and all of a sudden you’re near 100% fraud rate becomes a much smaller and harder to spot percentage that some merchants could easily ignore because the majority of the cash backs traffic is good.
The problem is that cash-back sites are just not geared up to look out for this type of fraud, indeed many freely admit they don’t have the time or indeed any clue as to what to look out for.
So I am going to help you a little here, don’t want to give to much off the game away publicly as no doubt some crafty fraudster is reading this blog post right now. So here is the simplest way to work out if a user is trying to defraud a merchant and a network and possibly getting you in to soapy bubble with the law for aiding and abetting this crime or at the very least having your site kicked from the program so your legitimate users don’t get access to it.
Simply set a flag in your database for leads based programs where you can only sign up the once to get cash-back, if a user signs-up more than 3 times you have a possible problem on your hands, if sign up 10+ times you have a fraudster.
With 100% cash-back in full swing I am waiting to see what effect this has on credit card transactions with foreign users of these cash-back sites being able to be paid via Paypal with minimal or no checks carried out on the transactions they are putting through one at a time across a vast array of networks and merchants.
Time will tell but if cash-back sites don’t take notice of this warning post. You may find that to compensate merchants will offer cash-back lower commission rates or indeed refuse to work with you if the level of abuse is to high.