One of the latest, and by no means the last, forms of e-commerce fraud is being perpetrated by firms that operate e-commerce websites and others that sell various items online and base their fees on web traffic counts. This sort of contractual fee provision creates an incentive for the website operator to boost its fees through what is known as "click farms".
A click farm is a group of low paid workers, typically in developing countries, who are paid to click onto websites to simulate web traffic. They are often paid one dollar per thousand clicks. Click farms create artificial visitors to the website that do not represent actual purchasers or people interested in making purchases. This drives up fees that are based upon clicks on the website.
A range of automated filters, algorithms and other techniques are being developed and used to combat click fraud. However, the problem is currently considered difficult to combat.
Businesses that are considering compensating website operators and/or others based upon clicks on their websites should carefully consider how they determine payment. If payment is going to be based upon clicks on the website, contracts need to contain significant protections insuring against fraudulent website traffic.
At a minimum, the agreement should make clear that the website operator is not to be paid based upon clicks from "click farms" or other phony users and that anti-click farm filters should be built into the website. If your business is faced with litigation over fraudulent website clicks, the litigation will involve costly experts and difficulties in proof. Therefore, you should take the necessary steps to avoid litigation.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
