Clickbank affiliate commisions - Analysis of the problem

As I'm now over 50 posts, it's time to write a post for the community, so I've decided to post an analysis.

I noticed in the past months a serious problem with affiliate commissions, especially with Clickbank. Messages show that many affiliates have no clue of the way their commissions get stolen.

My background is almost 40 years in IT. I am not a vendor at Clickbank or Paydotcom but I have extemsively studied both of their systems for possibly selling my coming books. I am an odd affiliate at clickbank who makes about $100 a month. But no commissions in November. Again no commissions in December but I tough it because my business model is not based on Clickbank or adsense, these are just pocket money.

There are THREE ways a commission can be stolen. Let's study them and what can be done about it both on the affiliate side and on the Clickbank/Paydotcom side.

I hope that the information I give here will not give ideas to those who didn't know how to manipulate the system, but I think it is important to explain clearly enough so everyone understands both the problem and its potential solutions - if there is one.

CASE ONE
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An affiliate decides to buy thru his own link.

The way to do it.

The affiliate finds a products that is promoted by another affiliate and decides to change the affiliate link for his own to get himself a nice dicount.

He does this on his own browser IE-Firefox by directly typing the link to Clickbank which sets a new cookie.

What can be done?

1- Paydotcom does not credit an affiliate buying thru his own link.
2- Clickbank does nothing.
3- The losing affiliate can do nothing. If the affiliate cloacks his link, the visitor will just follow it, then come back typing a new link of his own affiliate code.
4- The vendor can't do much..

The cloacking systems that I have seen peddled on the web can't do nothing about this as these systems are very easy to defeat.

CASE TWO
========

The visitor decides to get a free product.

He pays for it and asks for a refund before the end of the garantee period.

Paydotcom/Clickbank can't do much
The affiliate and the vendor take their loss.

Nothing can be done when you're dealing with bad faith.

CASE THREE
=========

Someone out there decides to make a million bucks by stealing affiliate commissions.

Here we're not talking about someone stealing ONE commission from ONE affiliate for ONE vendor but MULTIPLE commissions for MULTIPLE affiliates for MULTIPLE vendors.

What affiliates must understand is that the "hackers" who do this usually do not use anything hosted on the web but a small program, a trojan, located on the visitor's PC.

The affiliate is helpless in this situation and here is why.

Let clear the misconception of the way the internet works.

The general understanding is
1- The visitor comes on a web page - OK
2- The visitor clicks on a link - OK
3- The LINK DIRECTLY calls the new server - 50% OK
4- The new page shows - OK

This is approximately what happens but let's see more in detail without getting too technical.

Here is what really happens if there is no trojan on the visitor's PC

1- The visitor comes on a web page
2- The visitor clicks on an affiliate link
3- IE or Firefox reads the link (URL, domain name, web page, parameters)
4- IE or Firefox calls the server who hosts the domain name (clickbank)
5- The server interprets the domain name, the web page and the parameters
6- The server sends the requested web page to IE-Firefox
7- IE-Firefox shows the webpage on the screen

Now here is what happens if there is a trojan on the visitor's PC

1- The visitor comes on a web page
2- The visitor clicks on an affiliate link
3- IE or Firefox reads the link (URL, domain name, web page, parameters)
4- The trojan reads the domain name

5a- The trojan does NOT read the magic word (clickbank)
6a- The trojan does nothing
or
5b- The trojan reads the magic word (clickbank)
6b- The trojan replaces the affiliate code with another affiliate code

7- IE or Firefox calls the server who hosts the domain name (and the new affiliate)
8- The server interprets the domain name, the web page and the parameters
9- The server sends the requested web page to IE-Firefox
10- IE-Firefox shows the webpage on the screen

What can be done about this situation?

Only one thing can be done.
The visitor must remove the trojan from its PC BUT THE VISITOR DOES NOT CARE ABOUT IT...

The affiliate can do nothing on the visitor' PC
Clickbank/paydotcom can do nothing on the visitor' PC
The vendor can do nothing on the visitor' PC

Alhough statistics shows something fishy it's almost impossible to identify who's done it. And to whom exactly.

Clickbank knows how the scam is done. They have guys over there who are much more knowledgeable than I am but they do nothing because they can't do anything.

You may think it's easy to detect the scam but I am going now to tell you how I would do it if I was a hacker and this is very close to what hackers are really doing.

I would write a nice small utility software that everyone loves with dancing bees, fireworks or whatever any visitor not knowledgeable enough to use an antivirus will gladly download because it's free of charge. Then even if the visitor uninstalls the useless software, the trojan will flash "uninstalled" but will stay there...

This trojan would quietly sit in the visitor's PC for some time, doing absolutely nothing and avoiding getting attention at all costs.

Now when the visitor hits a clickbank page, the trojan is activated and switches affiliate codes.

You wonder why clickbank can't find this?

First my trojan contains about 200 clickbank accounts that I have opened under different names and addresses. So if the visitor buys three products during the same day the trojan will rotate affiliate codes and the visitor will randomly buy from three different clickbank affiliate accounts of mine.

Second my trojan is not installed on every PC in the world so clickbank affiliates still get a good chunk of their sales and the clickbank system continues to roll and provides everybody with commissions.

If I am clever enough, each of my clickbank accounts is artificially limited not to exceed a specific amount of commissions, different amount for each account, different amount each month so the Clickbank people have a tough time seeing a pattern and identify my accounts.

After a while I would write a new dancing bees software for the 64-bit PCs and my commissions will keep coming in.

My advice to affiliates is take what clickbank gives you because there is no way you can do anything about it except stopping using clickbank and losing all clickbank commissions.

Who knows how many hackers have clickbank trojans out there... or are busy writing new ones now that they see they won't get caught for a while...

I would be nervous if clickbank was playing an important role in my business model.