Avoid Becoming a Victim of Transaction Laundering



online transaction laundering

The ability of miscreants to come up with new crimes is limitless. One of the most recent and highly dangerous ways is via something known in the industry as transaction laundering. Protect yourself and your business by learning what it is and how to avoid becoming a victim.

What Is Transaction Laundering?

Think of merchant account or transaction laundering as today’s tech-savvy cousin to the centuries-old scheme of money laundering. Of course, there are times when the business owner is a part of the fraudulent scheme, but that often is not the case.

Frequently, criminals use legitimate merchant sites such as yours to funnel their illicit transactions without your knowledge or permission. The criminal activity often takes place through the affiliates you partner with to drive traffic and revenue to your site.

How Does It Happen?

To understand how affiliate transaction laundering occurs, imagine that one of your affiliates sells illicit drugs online. He needs a legal way to obtain the money from his sales. Consequently, he markets the substances on his site and then uses that money to buy content on yours, earning a pay-per-performance commission from you. If this happens in your business, you could be held liable on civil, criminal and regulatory levels.

Protect Yourself Against Unscrupulous Affiliates

Being connected with affiliates can be a real money-maker for you, but you need to be very careful about the company you keep. After all, not all money is obtained scrupulously. Protect yourself by taking these actions:

  • Review any affiliate before partnering with them. Continue to monitor them as long as you are connected to ensure that their content is legitimate and their advertising is true.
  • Take note of how your affiliates market their goods, making sure that unrelated items are not associated with them.
  • Only work with reputable affiliate networks. Do your homework.
  • Create a clear affiliate policy and make sure that you and your employees enforce it. If your instincts tell you that an affiliate is sketchy, sever your partnership.

Don’t allow your business to do some criminal’s dirty work. Careful research and vigilant monitoring will go a long way toward ensuring that your business transactions remain clean.