The affiliates and online marketing world in shock to learn that 2 Ebay Super affiliates were raided by the FBI an subsequently arrested for suspicion of internet Fraud.
According to www.businessinsider.com/, Mr Shawn Hogan, CEO of Digital Point Solutions (a successful online marketing company)and Mr Brian Dunning are reported to have made over $35 million dollars in affiliate commission from Ebay over a period of 7 years.
Both men were the most successful and biggest Ebay affiliate Marketers but Ebay began to suspect fraud in June 2006 as to the method by which the suspects were bringing traffic. At the same time the online auction site had also been cooperating with the FBI to investigate unusal high level of traffic activities from their top marketers.
Through the implementation of a dedicated and specialized software, Ebay began monitoring all traffic brought to them via affiliates. It is with the help of the software that the firm found out that both Hogan and Dunning were using Cookies stuffing via a software they had developed themselves namely "WhoLinked" and a widget called "Geo Visitors". The widget had been posted on hundreds of blogs and sites for free download, and users utilized this handy tool on various of their own blogs and sites (therefore bringing further users to utilize it). The trick was that the widget itself also triggered the "wholink" software which main function was to add cookies onto users PC without their consent. Once one of those users visited Ebay to purchase any items, Ebay's affiliate system would refer the commission to Mr Hogan and Dunning scooping millions in the process.
It is reported that over 670,000 cookies were illegally placed on peoples' computers without their consent. The alarm bells kicked in as both men were earning extraordinary revenue share in an industry where the average commission earning is $2700 per year. Both were making nearly $1.5 million per month!
Both men risk 20 years imprisonment, although the real sentence is likely to be far less.
The cases have sent ripples through eBay's affiliate marketing community. Many online marketers do not appear to realise that cookie-stuffing is illegal and can result in imprisonment and criminal charges.
Regardless of the innocence or guilt of Hogan and Dunning, the fact that the U.S. Attorney deems cookie stuffing criminal should be a wake-up call for our industry.