The promise is simple: join an affiliate program, promote products and services on your website, earn money.
While affiliate marketing is a legitimate industry, scammers are taking advantage of newcomers’ optimism and unfamiliarity to con them out of thousands of dollars. Better Business Bureau (BBB) shares common affiliate marketing scams and tips on how to avoid them.
What is affiliate marketing?
Affiliate marketing allows website owners to earn a commission by promoting products and services and referring sales or customers to another business. For example, a site about fashion might promote shoes for a particular brand.
Consumers on the fashion site who click on the shoe ad are then directed to the brand’s site where they are encouraged to make a purchase. If the consumer makes a purchase, the affiliate fashion site gets a percentage of the product’s sale price. While pay structures vary, most affiliate marketing programs pay per sale.
How are scammers using affiliate marketing to scam people?
Scammers are taking advantage of consumers’ unfamiliarity with the industry by offering to build websites, create ads, and/or train individuals, all for an upfront investment. Excited for the possibility of making money by just promoting products or services on their site, consumers report paying thousands and receiving no earnings.
In a complaint submitted to BBB, a consumer paid $3,000 for a four-month training course with the promise that it would teach her how to successfully run an affiliate marketing program from her newly created website. Months later, after not making any money, she contacted the company and was told the program did not work for everyone and that it might be due to lack of marketing by the consumer.
“But that’s not what I was sold! I would have never parted with $3,000 had I thought that, even though I had done everything I had been taught, it wasn’t going to work.”
In another case, a consumer was contacted about starting a website business for $275. After paying the fee, she was contacted again asking for an additional investment of $18,000 for the program to work and promising the site would include different companies, specifically Amazon, and would make $6,000 to $10,000 a month. The consumer wired the money, waited, and hasn’t received any earnings to date.
Better Business Bureau serving Central, Northern, and Western Arizona noticed an increase in complaints and scam tracker reports associated with affiliate marketing programs in recent months. So far this year, close to 50 complaints have been submitted against work-at-home companies offering website or online marketing services; 86 in 2015.
What are common affiliate marketing scams?
- Fake Affiliate Programs – Legitimate affiliate marketing programs are free and risk-free, such as Amazon Associates. Don’t fall into an illegal multi-level marketing scheme where instead of earning a commission from promoting a product or service, you earn money by recruiting new members to be part of the program.
- Fake Training Packages – After consumers purchase a website and realize they are not making money, scammers recommend training packages from hundreds to thousands of dollars. Most training packages fail to fulfill the promise of teaching how to build an online business that will start making money almost immediately. Look for trusted names when researching training options.
- Fake Products and Services – Be careful of affiliate marketing offers that don’t reference specific products or services. Ask what you’ll be promoting before joining a program.
- Fake Compensation – Don’t fall for promises to make thousands overnight. Remember, you need strategy and training to make an affiliate marketing program work.
What are the red flags of an affiliate marketing scam?
- Unsolicited phone call or email offering the opportunity to make easy money through a website
- Claiming association with the trusted “Amazon Associates” name without substantiation
- Offering a training course or marketing package for thousands of dollars