Whether generating or buying web leads or phone calls, there’s one overarching strategy you can use to avoid fraud at all times: establishing fraud patterns and updating your leadgen or acquisition accordingly.
To reveal these fraud patterns, you need to continuously analyze leads across dozens of parameters – including demographics, psychographics, firmographics, and more – before purchasing or submitting them to your advertiser or affiliate network. For example, this free IP fraud score tool can serve as a great starting point for comprehensive lead screening.
However, it’s usually the convergence of multiple patterns that you should look for to detect fraudulent leads. With this in mind, you’d like to employ a comprehensive suite of lead or call tracking software that enables complex lead analysis in real time and strategically.
Read on to learn more about fraud patterns SaaS companies should try to avoid at all costs.
Сommon Lead Generation & Acquisition Fraud Patterns
IP Fraud
IP fraud might be one of the simplest yet most damaging strategies that bad actors use to misrepresent the leads they sell. IP fraud may be used to bypass the advertiser’s geo-restrictions or sell leads that don’t exist.
The most common type of IP fraud involves using a VPN or proxy server to redirect traffic through multiple IP addresses, thereby masking the true source of the traffic. For example, an affiliate might use a VPN to submit hundreds or even thousands of leads from different IP addresses that all pass the advertiser’s qualification criteria.
Among the more elaborate IP fraud types are:
- IP spoofing – manipulating the IP address in HTTP headers
- IP rotation – rapidly changing a large number of IP addresses to avoid detection (for example, by using data center IPs or residential proxy servers)
- Botnets – using emulated devices to generate leads with unique IP addresses
Finally, even if IP fraud is detected and the affiliate is banned, they may acquire a new IP address and then repeat the same strategies they used to submit fraudulent traffic.
How To Prevent IP Fraud with IP Fraud Score Tools
The good news is that, as a buyer, you don’t necessarily have to play the whack-a-mole game. Instead of trying to pinpoint and ban low-quality and fraudulent affiliates, you can simply score incoming traffic and only accept leads and phone calls that score a required minimum.
- In the context of IP fraud, the scoring might boil down to establishing a minimum IP fraud score – say, 50 points – and simply rejecting every offered lead and phone call that doesn’t meet this score. In fact, the world’s your oyster – you can set, for example, lower IP fraud scores for cheaper leads while keeping the bar reasonably high for the leads that cost more.
An IP fraud score can encompass a variety of parameters. For example, you may want to consider whether the IP address in question is residential or associated with a data center, whether it is old or new, whether it is linked to a known VPN or proxy server, and whether it appears on general and industry-specific blacklists, among other factors.
Last but not least, depending on the nature of your lead acquisition campaign, risk tolerance, and strategy, the IP fraud score might not even be the only check you’re running. You may also want to verify the lead’s email address and phone number, as well as check them against industry-specific databases.
Mitmatching Leads
Not necessarily a sign of affiliate marketing fraud, mismatched leads rarely convert into customers and may cost you thousands of dollars if you fail to identify them timely. This is why it’s extremely important to have reasonable lead qualification criteria and screen the leads you buy, as well as the leads you sell if you generate customers for other businesses.
Speaking of lead screening, it’s actually the only way you can ensure you don’t buy or submit low-quality, irrelevant, duplicate, or fraudulent leads. The process itself, however, may encompass dozens of checks, from verifying the lead’s ID, email address, and location to any other information that can be tracked and run against internal and third-party databases.
Fake Leads
While mismatched leads are genuine customers, fake leads are fabricated contacts created by bots, scripts, and other tools employed by malicious actors. Being generated on the fly, fake leads may also come from stolen or recycled databases that are irrelevant to your campaign.
Things get more complex when unscrupulous affiliates mix fake leads with genuine leads – for example, to meet quotas that guarantee increased payouts or the fulfillment of obligations. In this scenario, it may take time until you can reveal these irrelevant leads and stop accepting them.
Duplicate Leads
There’s only one legit use case for submitting duplicate leads: selling shared leads while explicitly specifying that and preferably indicating the number of companies you’re going to sell your leads to (more often than not, shared leads are sold to 3 to 5 advertisers at the same time).
Under any other circumstances – and unless duplicates are a result of a technical error, such as a CRM syncing issue – selling duplicate leads is an illegal practice. Affiliates cannot resell their leads multiple times while also claiming they’re selling exclusive leads.
It’s not possible to guarantee that a specific lead wasn’t sold to other companies, but what you can do is check this lead against your internal database of all leads that have ever passed through your system. Then, if you’ve spotted that some details are duplicates – for example, a lead seems to be original, except that their email address is already in your database – you might want to be on the safe side and reject the lead.
Incentivized Traffic
Incentivized leads may not be immediately apparent, as they are real customers with legitimate IP addresses, locations, and phone numbers – the only drawback is that they are seeking a reward or bonus and are not genuinely interested in your product or service. No matter how effective your sales engagement is, the vast majority of these leads will ultimately bounce.
Lead generators and affiliates may use reward programs, sweepstakes, or surveys to entice users to submit their information and then sell this data as if it’s coming from someone looking for your product. In reality, incentivized leads rarely engage and almost never convert into customers.
To detect incentivized traffic, analyze lead source metadata, such as whether referral URLs are tied to a sweepstakes website. Likewise, you can also check their website for rewards, surveys, and other manipulative strategies.
How to Screen Leads and Phone Calls to Prevent Fraud
To reveal any type of fraud, from IP fraud to incentivized traffic, it’s essential to screen inbound leads and phone calls comprehensively across the tracked data. This way, you can reveal discrepancies and identify the most elaborate affiliate fraud.
For example, you can compare the IP-derived address and the address specified on a form. If there’s a mismatch – the IP indicates the lead is from India, while the lead is being sold as someone from New York, which is specified on a form – you might not want to proceed with the purchase.
Identifying discrepancies in data and behavior is even more crucial for companies providing on-site services, such as solar installation and maintenance, home services, and others. Since you must ensure that your on-site crew can actually reach the lead’s location, you may want to verify their physical location and phone number so you can make a call and confirm the provided data.
Lead Verification Software to Prevent Affiliate Fraud
Without a doubt, your lead verification software is your ultimate weapon in preventing low-quality, irrelevant, and downright fraudulent leads from even entering your marketing pipeline.
With the right suite of lead verification software, you can design a well-thought-out screening algorithm that is customized to specific campaigns and audiences, much more than an IP fraud score checker alone does.
You can run exactly the screenings you need, without overpaying for checks that might be irrelevant for this specific campaign, traffic source, or type of leads you’re buying or selling. Remember, the ultimate goal is not only to generate or submit purchase-ready leads but also to remain cost-effective, allowing you to generate profits.
