Affiliate Program Violations: What They Are & How to Avoid Them

Affiliate program violations occur when affiliates or brands breach the agreed-upon terms, leading to mistrust, revenue loss, and legal consequences. Notably, in 2020, fraudulent activity accounted for nearly 10% of affiliate traffic, highlighting the significant impact of violations on the industry. 

Let’s explore affiliate violations, the most common types with real-world examples, and the penalties that may follow.

What is an affiliate program violation?

Affiliate program violation refers to any action by affiliates or brands that breaches the terms and conditions outlined in an affiliate agreement. These violations can harm the program’s integrity, erode trust, and lead to financial and reputational damage. While some violations may be accidental due to a lack of clarity, others are deliberate attempts to exploit the system.

For instance, in 2020, fraudulent activities in affiliate marketing cost advertisers an estimated $1.4 billion globally. These violations often involve deceptive practices such as cookie stuffing, brand bidding, or misleading advertising. Identifying and addressing these issues is essential for maintaining the credibility and effectiveness of affiliate programs.

Affiliate program violations can also undermine the partnership’s core values: mutual growth and trust. For affiliates, violations risk termination from programs, loss of earnings, and damage to their reputation. For brands, unchecked violations can lead to wasted resources and the alienation of legitimate partners. Thus, understanding and addressing these violations is critical for both parties to ensure a thriving affiliate ecosystem.

05 common types of affiliate program violation 

Violations in affiliate programs can take many forms, each with its own challenges and implications. Let’s look at 5 most common types of affiliate rule violations, complete with definitions and real-world examples.

Cookie stuffing

Cookie stuffing occurs when affiliates plant tracking cookies on a user’s device without their consent, often through deceptive means. This enables the affiliate to claim commissions on sales they didn’t influence.

Case example: eBay vs. Shawn Hogan and Brian Dunning (2008)

eBay filed lawsuits against affiliates Shawn Hogan and Brian Dunning, accusing them of cookie stuffing to fraudulently generate commissions. They used scripts to plant eBay cookies on users’ devices without their knowledge. This practice resulted in millions of dollars in illegitimate commissions. Both affiliates faced lawsuits and criminal charges, with Dunning sentenced to 15 months in prison.

Brand bidding

Brand bidding happens when affiliates bid on a company’s branded keywords in paid search campaigns, often violating program terms. This can drive up advertising costs for the brand while diverting traffic.

Case example: American Airlines vs. Affiliate Bidders (2010)

American Airlines detected affiliates bidding on their brand name in Google Ads. These affiliates redirected users to their affiliate links, increasing American Airlines’ advertising costs and violating their affiliate program terms. The company promptly terminated the violating affiliates and reinforced their monitoring system.

Trademark infringement

This violation occurs when affiliates use a brand’s trademarked names, logos, or slogans without authorization, often in a way that confuses consumers or breaches intellectual property laws.

Case example: Amazon and Trademark Misuse (Ongoing)

Amazon has repeatedly acted against affiliates who misuse its brand name or logo without permission. For instance, affiliates have created websites resembling Amazon’s official page, misleading customers and violating trademark policies. Amazon continuously updates its terms to address such issues and suspends affiliates who violate them.

Misleading or false advertising

Affiliates who exaggerate product claims or use deceptive tactics to attract customers violate advertising guidelines and can harm the brand’s reputation.

Case example: FTC Crackdown on Dietary Supplement Affiliates (2016)

The Federal Trade Commission (FTC) acted against affiliates promoting dietary supplements with false health claims. One affiliate exaggerated the benefits of a weight-loss product, claiming it resulted in rapid weight loss without diet or exercise. The affiliate was fined, and the product manufacturer faced legal scrutiny for failing to monitor affiliate practices.

Fraudulent transactions

This includes tactics like fake leads, fraudulent coupon usage, or purchasing through their own links to generate commissions.

Case example: Rakuten Marketing and Fake Leads (2020)

Rakuten Marketing discovered an affiliate submitting fake leads for an insurance company client. The affiliate generated fake profiles and signed them up as leads to earn commissions. Rakuten refunded the client and terminated the affiliate’s account, introducing stricter verification procedures to prevent future fraud.

Penalties for affiliate program violations

Affiliate policy violations can lead to serious consequences for both affiliates and merchants. These penalties not only protect program integrity but also set a precedent for ethical practices. Below are some common penalties:

Account suspension or termination

When affiliates violate program terms, merchants often suspend or permanently terminate their accounts. This penalty is common for offenses like cookie stuffing, brand bidding, or unauthorized promotions.

For example, Amazon Associates regularly terminates accounts for using deceptive methods, such as offering undisclosed incentives to click affiliate links.

Forfeiture of earnings

Affiliates caught engaging in fraudulent or unethical practices may lose their unpaid commissions. In severe cases, merchants might even demand a refund of previously paid earnings if fraud is uncovered retroactively.

Legal Action

For major violations, especially those involving trademark misuse, fraud, or illegal activities, merchants can pursue legal action. This may result in fines, settlements, or even criminal charges for the offending party.

Blacklisting

Affiliates banned for violations might be blacklisted by networks or platforms, preventing them from joining other programs. Some merchants share lists of bad actors to maintain a safer affiliate ecosystem.

Reputational Damage

Violations can tarnish an affiliate’s credibility, making it difficult to regain trust in the affiliate marketing industry. Merchants with lax enforcement may also suffer reputational harm if the public associates them with unethical practices.

Enforcing penalties ensures fairness, protects the merchant’s brand reputation, and safeguards the interests of ethical affiliates. It also deters future violations and promotes a culture of compliance.

Tips to avoid affiliate program violations

Maintaining integrity and compliance in affiliate marketing benefits both affiliates and brands. Below are actionable tips to help both parties steer clear of affiliate contract violation. 

For brands

Clearly define program terms and conditions

Create comprehensive and transparent program guidelines that cover allowed and prohibited practices. Specify rules for content usage, cookie policies, and promotional methods.

Regularly monitor affiliate activities

Implement tracking tools or partner with affiliate management platforms to monitor affiliate campaigns and detect violations early. Automated alerts can help catch issues like unauthorized bidding or fraud.

Tip: Use tools like BixGrow or Impact to streamline monitoring.

Establish a penalty structure

Clearly outline penalties for specific violations in your program terms. This ensures affiliates understand the consequences of non-compliance.

For affiliates

Read and adhere to program policies

Before promoting a product, thoroughly review the program’s terms and conditions. Avoid assumptions and clarify ambiguities with the program manager.

Tip: Bookmark program rules for quick reference.

Use ethical and transparent practices

Avoid misleading tactics like cookie stuffing, fake promotions, or unauthorized ads. Focus on providing genuine value to your audience through honest reviews and accurate information.

Always disclose affiliate relationships and ads

To comply with FTC rules, include clear and conspicuous disclosures in all affiliate content. This builds trust with your audience and avoids regulatory penalties.

Use phrases like “This post contains affiliate links, and I may earn a commission if you purchase through them.”

Stay updated on changes in program rules

Affiliate programs often update their policies to adapt to industry trends or address new risks. Keep an eye on email updates or announcements from the program manager.

Google Ads policies frequently update, and affiliates must adjust campaigns accordingly.

Conclusion

Affiliate program violations can severely impact both brands and affiliates, damaging reputations and resulting in financial consequences. Understanding the common types of violations, such as misleading advertising, cookie stuffing, or unauthorized use of brand assets, is key to avoiding these pitfalls. By implementing clear guidelines, maintaining transparency, and adhering to industry regulations, both affiliates and brands can foster a strong and trustworthy partnership.

For brands, staying vigilant in monitoring affiliate activities and enforcing clear terms can help prevent violations. For affiliates, understanding your responsibilities, including disclosing affiliate relationships, ensures compliance and builds lasting relationships with your audience. With the right practices in place, you can avoid violations and succeed in your affiliate marketing endeavors.

By prioritizing transparency, honesty, and communication, you can ensure your affiliate program remains effective and compliant.