The Ultimate Guide to Preventing Lead Generation Fraud in 2020

Prevent lead fraud against sophisticated affiliate fraud with 5 quick tips to detect fraudulent leads.

Lead generation fraud has existed for decades, but only recently became a serious issue that has caused some businesses in the lead gen industry to completely close down. So why the sudden change? Well fraudsters in 2020 and beyond now have access to a number of tools which can fraudulently submit leads, usually with stolen user information hidden behind proxies or VPNs.

As generating fake leads continues to become more sophisticated each year, it can be quite difficult to accurately prevent lead generation fraud. Let's take a look at how these programs work.

Lead Generation Fraud In 2020's Climate

prevent fraudulent leads

Lead generation and performance marketing based programs revolve around a commission per defined action, such as when a user submits a form, signs up, or purchases an item.

So what exactly is lead generation fraud? Any type of misrepresented user action or user data designed to fraudulently generate a payable commission. For example, this could include purposefully deceitful data for the site of capture, opt-in status, email address, personal user data, lead age, IP address, similar meta data associated with the IP address. The fraudster's goal is to get paid for fake leads or low quality submissions.

Lead gen programs can also include user action goals for purchases and app installs. It is quite common for performance based marketing to encounter chargebacks and fraudulent app installs, as fraudsters have access to many tools which can make this possible. Lead abuse can extend to both cost-per-action (CPA) and cost-per-lead (CPL) campaign types.

Even lending & mortgage application leads have seen a huge increase in abuse over the past few years. While stolen user data and identity theft complicate mitigation techniques, the guide below includes many ways to reduce 1st payment defaults and applicants that never make a payment.

Preventing Lead Generation Fraud

Now that you've heard the bad, let's focus on the many ways to protect your lead generation program from fake leads, fraudulent chargebacks, and the best ways to perform user validation.

The options slightly depend on your lead capture setup, such as if you use Ping Tree or Ping & Post methods, or capture the data directly on your landing page. Both ways can be fully protected with the recommendations below.

Analyze Campaign Metrics

Analyze click through (CTR) and conversion rates (CR) from the affiliates or lead source. Affiliates with a very high conversion rate, can represent a giant red flag that fraudulent traffic or malicious activity may be occurring. Affiliate and source tracking is also useful to help identify where most of your fraud is coming from. Once you've been able to identify which leads have disconnected phone numbers, low quality users, or generate reversals, you can then focus on cutting down the high risk sources.

Check Traffic for Bot Submissions

One of the most accurate indicators to detect lead gen fraud is checking your traffic for any bot patterns. Fraudulent affiliates will frequently use bot programs since they can quickly complete repetitive tasks to submit fake leads or facilitate account creation fraud. Using a quick API request to analyze the IP address or device properties can accurately detect bot traffic. Everything from the frequency of submissions to the actual device behavior can be used to identify suspicious leads.

Instantly Protect Your Campaigns From Lead Gen Fraud

Validate Email Addresses

A wealth of data can be obtained simply by validating email addresses as they are fed into your system. Emails likely to bounce or deactivated accounts can be scrubbed your mailing lists. Taking this a step further, it's also possible to identify email addresses recently exposed during a data breach which could be submitted from stolen user info. Fraudsters like to use real information whenever possible to try and fool any lead scoring services so being able to generate an email risk score is a great way to filter high risk leads.

Monitor Click Fraud

Click fraud is popular with abusive affiliates as the techniques overlap very closely with lead fraud. The IP addresses and browser combinations used for ad fraud are also used to submit invalid leads. Performing a quick IP reputation check to detect proxies or VPNs can help pre filter many leads. We recommend using a full suite of tools that work for both affiliate traffic and paid traffic sources to protect against click fraud.

Verify User Data

Beyond the email address, additional data points especially those from ping tree methods can be validated. In fact, performing phone validation on the lead's provided cell or landline number can provide great insight into the overall lead quality. Google Voice, VOIP, and other risky services can help filter poor quality leads. Address verification for the postal address also provides a good indication of the lead's health. Our APIs also support combined lookups an email, phone, IP, and similar user data can be combined into one simple reputation check.

Finding The Right Balance

By using a combination of user validation methods to verify lead generation data, it's possible to calculate an overall risk score for each lead and identify fraudulent affiliates that are sending the bulk of invalid leads. The methods discussed above can be applied to ping & post lead generation or even directly within forms. Whenever possible, it is recommended to pause sources that are sending high levels of fraudulent leads. This can be tricky when sub sources and sub affiliates are involved. Consider using an overall affiliate fraud prevention service to manage your campaigns and sources for the best defense against lead fraud.

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