Cash-back Crooks!!!

Posted on 04. Mar, 2008 by in Education

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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.

7 Responses to “Cash-back Crooks!!!”

  1. Chris Johnson

    04. Mar, 2008

    I would say that new cashback sites are more susceptible to fraudulent users than the more established ones.

    We have our own fraudulent systems which are built into FreeFivers and CashbackJunction that in essence stop the user from signing up to lead based ‘once-only’ sites. As time goes by and you continue running a cashback site you notice these fraudulent users and loopholes and add more technical ways of stopping them.

    The loyalty association(!) – which has recently been quite quiet – could possibly add rules for cashback sites and their backend system for fraud.

  2. Nadeem Azam

    04. Mar, 2008

    Good blog post Clarke and Chris is completely right.

    “indeed many freely admit they don’t have the time or indeed any clue as to what to look out for.”

    In terms of eDeals UK – our client – that is not the case. eDealsUK have spent years setting up the technology and infrastructure to make sure that things like CPA fraud are reduced. It is incredibly time-consuming to handle such issues and that is why we have more customer-facing staff than any incentive site in the UK. Indeed, 12 new staff started yesterday (Monday).

    There are also sophisticated systems in place to root out fraud. For example, if somebody signs-up and participates in two CPA offers, they will be flagged up by eDealsUK’s systems and thoroughly investigated. There are other very clever tools in place to root out lead based fraud as much as possible, but I obviously can’t reveal them because that would provide knowledge to the fraudsters.

    Chris – I know that the Cashback Loyal Association has plans to tackle this issue.

  3. Richard Yendall

    05. Mar, 2008

    Good points, Clarke

    I agree this is perfect territory for The Loyalty Association and is one of the reasons it was formed. Those loyalty sites who are already members of the Association already do take positive stpes to minimise fraudulent transactions, but I’m sure there’s more we could do. We would very much welcome discussions with any networks and merchants, so we can develop specific standards. Not all loyalty sites are the same, and us ‘good guys’ would jump at an opportunity to demonstrate it 🙂

    And membership of the Association is open to any loyalty sites that have yet to join us and are willing to commit to maintaining good practice 😉

  4. Stephen

    07. Mar, 2008

    Good post, although you shouldn’t let any user sign up more than once for a lead offer?!

    As someone who has seen both the merchant and affiliate perspective on an incentive site, I know you’re right that it takes a lot of work and/or tech savvy to stop.

    The big guys will have lots of detection measures in place, after all they are in it for the long haul and don’t want to get thrown off good programmes, but I imagine start-up sites are quite vulnerable.

    Glad to see networks ready to give advice on this issue. You’re right not to give the answers in public though.

  5. Reece Coleman

    21. Jul, 2008

    I have first hand experience of this from trying to run my own cashback site some time ago. By the end of it, I was spending all my time weeding out fraudsters & getting more & more frustrated by the time wasters & crooks that were just costing me money with their scams! In the end I had to shut the site down because I was losing too much money.

    After a year off, I decided to try again with a white label site & the great thing about Cashback Shopper is that it uses the eDealsUK back-end to ensure payments are made to those who use the site properly & they deal with all the fraudsters using their technology and infrastructure to make sure that things like CPA fraud are reduced.

    As Nadeem mentioned above they have more customer-facing staff than any incentive site in the UK & deal with customer tickets within 24 hours rather than days like some other sites!

  6. Alan_j

    19. Nov, 2009

    If you ask me, the biggest crooks are those that run these cashback sites – missing transactions, they just pocket them and they know it. CROOKS, I could mention loads o’ them

  7. Clarke

    19. Nov, 2009

    Hi Alan, lots of missing transactions are down to user error or user greed by trying to get cash back from more than one site. I seen this loads of this in my role of working at a Network. I also see the hard working cash back sites trying to recover commission on behalf of customers for one reason or another has not tracked correctly. I would recommend that you don’t use the sites you feel are doing that and find the good ones.