2008 seems like so long ago. But you need to be aware, and prepare, for changes in Affiliate Marketing due in 2011 because of the Housing and Economic Recovery Act of 2008. You see, a new IRS form (Form 1099-K)will be required from payment processors. You know, PayPal, Google Checkout, Amazon Payments, Credit Card Processors, etc. And the rules are pretty simple.
If you receive more than $20,000 in payments during the year and have a total of more than 200 payments then a 1099-K is going to be sent to both you and the IRS from your payment processor. I’ve done a little math and although nowhere near the majority of Performance Marketing Affiliates will be affected… The “Super Affiliates” most certainly will be affected. And most fraudulant affiliates churn enough money to qualify.
Which means that the Evil Ecosystem of Affiliate Fraud will expand. Because the basic tactic of fraudsters is to have multiple accounts of every type (including multiple PayPal type accounts). Which will make it easier for Networks, Payment Processors, and Affiliate Managers to identify both the services that are enabling fraud, and the affiliates who are using those services to commit fraud.
Now, if the Networks step up and require affiliates to be organized like real businesses (and face it, affiliate marketing is a business) AND the payment processors are reporting incomes. The frauds are going to become very easy to identify. Some fraudsters will fall through the cracks to be sure. And International Fraudsters will still be tough to deal with. But it’s a start. And it would benefit all of us to help weed out the bad so the good won’t have to become a regulated industry.
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