Affiliate Fraud is of 2 types: automatic affiliate fraud and affiliate fraud done by humans. Payment model for affiliates is pay per sale or pay per click. The Affiliate Fraud is committed on the pay per sale model, where affiliates are paid per click for the amount of traffic they bring to the site. The affiliates usually create automated scripts that are programmed to resemble the activity of real human visitors. These bots are referred to as "click bots" . Click Bot is one of the main sources of pay per click affiliate fraud.

In order to minimize affiliate fraud:

1) The traffic should be scrutinized , watch out for difference in patterns in traffic without affiliate traffic and then match it with affiliate traffic and mark the unusual spikes in traffic.

2) Are the affiliates producing too much traffic and no conversions? Watch out for the conversions that your affiliates produce. If there are conversions in non affiliate traffic and the affiliate is not able to produce a reasonable number of conversions despite off making you write an hefty cheque every month for the loads of affiliate traffic generated then it's most probably an affiliate fraud case.

The pay per click affiliate model should be replaced by something more innovative, less vulnerable to being hacked and more reliable as a marketing system - both for advertisers and independent publishers alike.