Affiliate fraud is real and one of the ugly parts of affiliate marketing. FirstPromoter already has built-in protection against fraud, like generating rewards only when the sale is confirmed on the billing provider, automatic refund tracking or self-referral detection.

However, some companies, because of their industry and type of affiliates that register on their program, have to deal with multiple fraud attempts. To help them out more, we launched 2 new features to increase protection against chargeback fraud and self-referrals. The new features can be found under Settings > Fraud protection tab.

new Require a minimum number of paying customers to generate the payout

This feature almost completely avoids self-referral fraud, where an affiliate signs up from their own referral link to get a commission from their own purchase. The affiliate will need to subscribe at least one other user (or higher, depends on the number you set) to get paid. The users must not be cancelled, they need to be active, paying customers for the payout to be generated.

This also helps around other types of fraud because it becomes harder for the fraudster to create multiple accounts and keep them subscribed.

new Require manual approval for commissions above an amount

On most cases of chargeback fraud, where the affiliate asks for a chargeback after a while or uses stolen credit cards and the bank issues a chargeback, the fraudster subscribes to the high tier/annual plans or makes expensive purchases to receive high commissions. With this feature, you can keep higher commissions as pending until you verify if the customer is a real user (ex. has activity inside your application, has a real email, etc).

Even with these features enabled, the best measure is to manually review and verify each affiliate when they sign up to your program. If some bad actors slip in, you'll have another round of defense against them.