The first step to prevent fraud in your lead gen campaigns is knowing which sources are most likely to produce fraudulent information. How the leads are generated plays the biggest role in whether the lead generation campaign will produce false leads at a high rate rather than high-quality leads. Let's look at some examples of which lead generation programs are most susceptible to fraudulent traffic sources and why.
High-risk sources of traffic
Certain marketing channels have a higher likelihood of producing bot traffic and attracting bad actors to your marketing funnel such as human fraud farms. Websites without solid security measures in place can lead to a data breach that gives hackers access to databases, enabling them to scrape the personal information of real visitors to mimic a legitimate lead.
Sub sources that multiple advertisers have access to
Sources of traffic like lead networks are another way bad actors find a way to commit fraud. Affiliate marketing efforts often suffer from lead fraud because there can be significant incentives to cheat using fake or stolen data. For example, affiliate programs that pay hundreds of dollars for visitor information regardless of lead quality create huge incentives for lead gen fraud.
Leads generated through cost-per-click programs
Cost-per-click programs are another risky method of generating leads. When only a click is required to earn credit for providing a new lead, it can be extremely easy for bad actors to use software and other tactics to commit lead fraud. By masking their actions using different IP addresses, fraudsters take advantage of these lead generation campaigns to quickly rack up ad fees and commissions.
Lead forms that only ask for phone numbers
Another way ad fraud is committed against digital marketers is by inputting fake phone numbers on forms. Typically, a landing page for a lead magnet such as an ebook, a coupon, or something of value requires visitors to enter their contact info. If the form only asks for a phone number and name, it’s easier for fraudsters to fake since they need limited information. The less information required on a lead form the easier it is for fraud to be committed.
Scraping data for phone numbers is a simple task for fraudsters seeking to take advantage of businesses that depend on leads to survive. So when you want to prevent fraud, paying attention to the amount of information the lead form asks for is essential.
What are the consequences of lead generation fraud?
There are numerous negative consequences of lead generation fraud. Brand reputation damage is a serious consequence, but there are rippling financial effects as well. From the lead gen company to the businesses buying leads to the sales team that's calling the leads, many layers of people are negatively impacted by lead fraud. Here are the four main ways this type of ad fraud hurts companies.
If a lot of people are being called who never asked to be contacted by your company, your brand reputation suffers. These people will ask themselves where and how you’re getting their contact information, damaging the image of your company.
Lower contact rates that waste call center resources
Fraudulent lead information can also cause your contact rates to take a dive. When people aren’t expecting a call about your services, they either don’t answer or take a long time to respond. Once your salespeople finally hear back, it’s a no. This wastes precious call center resources that could be spent on leads that convert.
Wasted marketing resources from a higher cost per lead
Lower conversion rates are another consequence of lead gen fraud. If you've noticed a sudden decline in your conversion rates, you might want to look into whether or not fraud is the root cause. Lead generation fraud increases your cost per lead and ultimately your cost per acquisition because your percentage of leads that don’t convert goes up. This wastes your marketing resources.
Being fined for TCPA Violations
Another major consequence of lead gen fraud is being hit with TCPA violations and potential fines. People take the do not call list very seriously, creating a high potential for your company getting in trouble when the leads you call never provided their information. This is a leading reason why blocking leads filled with stolen personal information is so important.