Criminals killed my affiliate program! Please help!
I opened an affiliate program for my commercial website in 2000, which I ran and managed myself using the Ultimate Affiliate script. I differentiated my affiliate program by offering nearly instant electronic payouts of commissions using e-gold to all my affiliates.
At first the affiliate program was a great success. Signups increased tremendously, my legitimate affiliates brought in a lot of new subscriptions and were happy with their nearly instant payouts of commissions.
But somewhere around 2001-2002 trouble emerged. My affiliate program was discovered by criminals from Vietnam, the Philippines and other third world countries. They started using stolen credit card information to generate lots of signups and then requested their commissions from those fraudulent signups. I was swamped. I no longer knew which signups and commissions were legitimate and which were fraudulent. It also turned out that my chosen credit card processors at the time were unable to screen for fraud (contrary to what they promised when I signed up with them) and were happy to accept all those fraudulent credit card payments.
As a consequence, I lost thousands of dollars in commissions I paid to criminals, I lost thousands of dollars in chargebacks and fines I later had to pay for all those fraudulent signups my credit card processors were unable to screen for, I lost thousands of dollar for sales that never took place, I lost my accounts with those credit card processors, not to mention all the lost earnings for lots of downtime when I lost my accounts and losing all my legitimate affiliates, when I finally had to close down the affiliate program.
However, my site and product is still going strong. For a couple of years now it has been accumulating signups and strong sales without any kind of advertising or affiliate referrals at all. I am still being asked by my former and hopeful new affiliates if I have plans to reopen the affiliate program. I would very much like to, since my membership website is excellent and I'm sure the commissions would benefit any potential affiliate.
But I no longer wish to deal with the head-ache of being overrun by criminals. I understand that the root of the problem may have been my promise of instant payouts in e-gold, but even if I eliminate that, who's to say that criminals still won't use fraudulent signups and then wait for their checks? My current credit card processor has excellent fraud screening, but since I no longer offer the instant payout affiliate program, it hasn't been tested against too many fraudulent signups.
Neither do I really want to be personally writing out checks. I wish for the affiliate commissions to be somehow distributed automatically by a third party. Unfortunately my current credit card processor does not offer an affiliate program.
In my mind, this would be my ideal affiliate program. A third-party company - let's call it "Affiliate Master" - deals with everything related to being an affiliate to my site. I direct potential affiliates to Affiliate Master, who then gives them all the data and links to promote my site and hopefully also makes some sort of a background check. I also integrate necessary scripts with the signup systems on my website, so that when a purchase is made, then data is sent to Affiliate Master about what kind of sale was made, who was the referring affiliate and how much is the commission.
Then I pre-pay Affiliate Master for example $1000, which it then will start distributing to all my affiliates according to what sales they bring to my site minus their own fee. Once the money runs out, I need to send them some more money etc. Also, if a sale results in a chargeback or refund, the data is then sent to Affiliate Master and the affiliate who originally got the commission for it will have his commission deleted for that sale. An affiliate with too many refunds or chargebacks will be deleted immediately.
I have absolutely no idea though, if such a possibility exists today. Are there programs/companies like that? If so, which ones would you recommend? If there are no such companies, what would you advise me to do? Or where could I find more information about this? I still want to reopen an affiliate program to my site, but I no longer want the associated head-ache.