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Fight Fraudsters Dead: ScrubKit and Brian McLevis Kill Fraud

Fight Fraudsters Dead: ScrubKit and Brian McLevis Kill Fraud

Brian McLevis is pretty sure he’s on the right side of the industry, and he’s doing everything possible to make this clear. The Mr.Clean look-alike is the CEO of ScrubKit, the newest contender in a growing industry of fraud protection services. He’s taking his message of anti-fraud on the road and letting everyone know that he feels that his company is the not only the best solution for fighting fraud, but in his opinion the only solution that makes sense. His no-nonsense attitude about fraud, how to hit fraudsters and how to deal with the industry has made him well known in industry circles and has created a buzz around both him and Scrubkit. If you don’t think fraud is an issue in the industry, this interview exposes not only the problems but how McLevis wants to punch out every fraudster personally.

How did you get started in the performance marketing industry?
I actually got my initial taste of Internet/Affiliate Marketing back in late 2006. My brother – who works at a well-known adult dating site – turned me on to an automated bot that created accounts, sent messages and did all of the basic MySpace functions on autopilot. At the time, MySpace was still a fledgling company and their code was, well… it was pretty weak and full of loopholes. As such, it was extremely exploitable and thankfully (at least for me) made them very “spammable”.

I was working as a systems/network admin in the professional arena at the time. Fortunately, I possessed the technical knowledge and knowhow to take full advantage of this new discovery and scale it wide open. Before you knew it, I was running 12 different servers 24/7/365 and pushing 3,000 GB xfer/mo through the Internet pipes, ultimately generating something like 30,000 uniques a DAY to my landers.

A “baptism by fire” my wife calls it and I couldn’t agree more. I was thrust into the online world of making money online and, as is the usual in this industry, I absolutely loved it and became obsessed.

What made you interested in starting a fraud protection tool for the performance marketing industry?
Scrubkit was initially a tool designed for the sole purpose of protecting my CPA network, Envyus Media. When that venture first started out, I realized (much to my dismay) that fraud ran rampant and roughshod all throughout the industry. I never in my wildest dreams knew there would be that many people trying to defraud companies out of billions of dollars a year. It was a rude awakening, indeed!

Chris, who is the developer and co-founder of Scrubkit ended up saying to me, “Why don’t we just turn this into a system that we lease out?” And that essentially kicked off the creation and development of Scrubkit.

Believe it or not, the Fraud/Risk Management arena is actually an extremely fun space to operate in. I’m the type of person who, if told they can’t do something, will do whatever it takes to achieve the impossible – sometimes just to prove you wrong. It’s similar in regards to fraudsters. They believe that they’re so smart and dedicate themselves to continuously proving that they can fraud networks and constantly get away with it.

Thanks to my highly technical professional background as a systems and network admin though – along with the overall hax0ring experience I learned and cultivated since I was at the ripe old age of 13 – I’m able to essentially stay two steps ahead of these fraudsters. It’s unreal. I’ll wake up in the middle of the night sometimes, stumble to my computer and jot down a few ideas of how we can strengthen and improve our system.

I eat, sleep and breathe fraud/risk management now. And I love it.

What is probably the most interesting thing you’ve discovered while dealing with fraudsters?
I’d say that they believe that they’re so smart despite the vast majority of them making the biggest mistakes like – ever. I mean, let’s be honest. Ever since the Online Marketing industry started up, there was no real automated fraud prevention and risk management system available to the public. There were companies that built their own internal systems that I’m sure worked up to a point, but there hasn’t been anything even close to Scrubkit available for leasing out there.

Every time a fraudster makes a mistake they essentially leave a virtual footprint and that’s ultimately where Scrubkit nails them dead on. The funniest thing is a lot of them ask for “proof” of how “you know it’s fraud”. Obviously you should never provide them with such proof because – as the saying goes – knowledge is power. And we definitely don’t want to empower these snakes in any way, shape or form.

The generalized population of fraudsters are usually inexperienced people that get information, tips and tricks and “proven methods” on message boards and forums. They try them out on different CPA networks and these people are the easy ones to catch. They literally have no idea what they’re doing and it shines through in everything they say on the phone and/or in their application.

Don’t get me wrong, though. The fraudsters with stolen credit cards, botnets and high-tech scripts are where the real problem lies. And you only have to worry about these guys if you don’t have Scrubkit integrated into your network.

Even though these “high tech” fraudsters go to excessive and extensive lengths and spend an immense amount of time coding their advanced fraud systems, they’re still absolutely NO match for Scrubkit. Like I said, every fraudster leaves a virtual footprint and once we catch one of them, they’re dead in their tracks — in addition to every other fraudster utilizing the same methods.

I like to joke that fraudsters tell their children stories of Scrubkit to scare them and keep them in line. We’re the monster under the bed for these guys, despite theoretically being the good guys in the grand scheme of things.

Why is your system better than your competitors?
Well, to be completely honest, we don’t even have any real competition. Other companies in the fraud and risk management space have a whole different approach in how they handle fraud management. They analyze data and provide a “risk score” of sorts. But what does a risk score really even prove?

If you see a score of 60, what does 60 truly represent? If you’re an advertiser and you go to a network and say, “Hey, this affiliate has a risk score of 60. Uhh, what in the world does that mean?” Can you really react based on facts and evidence when you don’t even know what’s really going on? Do you have a good feeling in your gut when you’re terminating and/or taking action on someone based on such insubstantial evidence? Of course not!

What we provide with Scrubkit is a highly robust and intuitive interface that initializes from a very high level overview. It allows you to drill down (so to speak) to an extremely in-depth, hardcore granular level and analyze things at the most technical level possible. The system provides you with extremely detailed data that shows you anything and everything happening within your tracking system. These details will highlight wherever there is potential risk, so you can prevent fraud in a very simple, streamlined way. Everything is color coded for your convenience so as to alert you to the potential severity of the risks via textual alerts. Our triggers will outline exactly which data points have been reached from a fraudulent/risk threshold perspective.

You can basically just log into Scrubkit, glance over everything for a couple of minutes and determine right away if there is risk and where it is coming from. If nothing is found, you can just go ahead about your business once again. Not to mention get a good night sleep.

Going back to the original question though, we don’t have any real competition. We operate on an entirely different level than anyone else in this arena and we’re completely and totally dedicated to continuing to be the best possible fraud/risk management system in the space for our clients. In addition to all of this, we strongly encourage our clients to provide feedback in regards to features or triggers they’d like to see implemented. It’s a continuously shared, evolving process where every single client benefits from every feature we implement. It really does foster a team environment in which everyone’s shared goal is the prevention and ultimate eradication of fraud of any and all kinds.

What do you say to networks that say they need no fraud protection system?
There isn’t a single network in the industry that doesn’t have fraud constantly knocking and trying to break down their door. To date, we have not begun working with a network that didn’t have any fraud. It’s like a virus that has spread everywhere, unfortunately.

Granted, some networks have more fraud than others, but we help them to immediately identify any and all risks as soon as they hop on board. Once they get things cleaned up, they’re back to worrying and working on the other day-to-day things that one does when running a network — with the added benefit of not having to worry about fraud morning, noon and night anymore.

What’s truly disappointing is that a lot of advertisers create an annual budget without including costs needed to detect fraud. In the end, they’ll actually end up paying out on fraud because of this. I think this is why some networks will say, “We don’t have any fraud.” It’s for the simple fact that these advertisers are paying out on fraud unknowingly and this is just sad really. It’s really hindered the industry and kept the big brands from even contemplating working with CPA networks.

Scrubkit aims to change that, however. Over time, we’ll spread out to the vast majority of networks, agencies and advertisers and the industry is going to be a much better (and cleaner) place to operate in. We’re going to see bigger brands coming into the space and wanting to promote their products and brands and it can only mean good things for the industry as a whole.

Don’t take this the wrong way, but any network that says they don’t have any fraud is completely clueless and has no idea what they’re talking about. It’s almost juvenile. They’re living in a fairy tale land where they think they can avoid the fraud that literally propagates every other network in the industry.

Every network has fraud, unfortunately. Period.  End of story.

What is the top type of fraud you are seeing from bad affiliates?
Without going into too much detail (for obvious reasons), I would say that it ultimately depends on the vertical. We see a lot of overall fraud in the leadgen offers because it’s my assumption that fraudsters buy lists that contain information about a person. You know personal stuff such as name, phone number, address, city, state, zip code, etc. The fraudsters then plug in that information into the lead form in the hopes of passing the verification checks.

Depending on if the advertiser is using some sort of form field validation or not than the fraudster very well might get away with it. If they were using Scrubkit however, they wouldn’t have to worry about these. We always catch this type of fraud as its quite easily identifiable.

The more advanced fraudsters we discussed already actually run their own personal botnets and proxy servers through home based computers. When the installs (also referred to as rats) are fresh, they’re not immediately detected as a proxy or abused IP space. When the IP space appears clean, Scrubkit will continue to monitor multiple other data points that fraudsters ultimately cannot circumvent which results in them getting caught red handed.

I would honestly really like to get inside the heads of some of the more advanced fraudsters and listen to their thoughts whenever they get caught by a Scrubkit client. I bet they just keep saying over and over “How in the world did I get caught?” and subsequently beat their head on a desk. Their money and countless hours of effort put into the development of their frauding systems are all for naught and they’re terminated in the end. Unfortunately, they’ll just pack up their things and head along to the next network, repeating the process until they find somewhere that doesn’t have Scrubkit to peddle their fraud.

How does fraud protection help the incentive based industry?
There are all sorts of incentivized traffic. Some are soft incent, some are moderate and some are so hardcore that they’re borderline frigging illegal. The incent industry is one in its own and their thresholds for fraud/risk are required to be set a little higher than when dealing with other offers. This is mainly due to the consumers seeking out free movies, free games and pirated software. Obviously the consumer’s computer is probably infested with a rat and Scrubkit is going to pick this up as being a proxy.

We have clients that run a lot of incent offers and through them we’ve learned that we need to educate them differently. They might need to be a tad more lenient on the triggered alerts because of the unique characteristics of an incent offer. One thing to keep in mind is that some affiliates think incent means you can do whatever it is that you want (aka: fraud the offer). As we all know, this is most certainly not the case.

Scrubkit helps to nail down these affiliates and get them terminated from the network for their attempts to defraud the advertiser.

Read Part II Here

 

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About Pace Lattin

Pace Lattin is one of the top experts in interactive advertising, affiliate marketing. Pace Lattin is known for his dedication to ethics in marketing, and focus on compliance and fraud in the industry, and has written numerous articles for publications from MediaPost, ClickZ, ADOTAS and his own blogs.
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