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The Fight Against Affiliate Marketing Fraud in Higher Ed: Q&A with iDatafy

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It’s not too difficult to find people who will call the cost of a college education these days highway robbery, but what they might not know is that there are fraudsters who do a little looting of their own, scamming universities out of financial aid payouts. Last school year alone, about $1.2 billion in U.S. taxpayer money was doled out to con artists who took Pell Grants and never ended up attending a single class.

Money bag fraudster

This is where iDatafy enters the picture.  The company aims to help in the fight against this type of fraud by maintaining a database of bad leads. To learn more about how it does this, along with what “paid to answer” fraud is, read our Q&A with founder and CEO Dave Wengel below. Wengel is a third-generation entrepreneur who founded iDatafy in December 2011.

How would you describe iDatafy in one sentence?
iDatafy helps companies identify potential fraud through the use of patent-pending contributory database solutions.

Can you walk us through the history of iDatafy, along with how the company’s name was chosen?
We are a bootstrapped data startup based in Little Rock, Ark. I started the company because it was becoming apparent that online lead quality was getting worse despite the maturation of numerous lead-quality solutions on the market. I wanted to see if we could discover why that was the case, and we feel that after 18 months of research we have not only discovered the causes but come up with a unique solution to turn the tide as well.

Dave Wengel

Dave Wengel, founder and CEO of iDatafy

Naming the company is one of my fondest early memories, actually. I still have the sheet of paper with two columns of brainstormed names – one column had words like “identify,” “indicate,” etc., in it; and the other column simply had our focus, which is “data.” I mashed a lot of the options up and eventually came to “iDatafy.” I couldn’t believe that: 1) the domain was available or 2) it wasn’t already copyrighted. I don’t think we spent more than $500 to copyright the name, register the Web domain and develop our logo. It’s those little wins that make starting a company of your own so exciting, in my opinion.

We have indexed more than 15 million known bad online leads to date. In short, we can help companies steer clear of the worst of these leads. One of our best partners described us as a “Geiger counter to detect the most radioactive leads.” I love that description.

Is online lead quality getting better or worse? Why do you think this is?
I think it is finally turning the corner. For years it was too easy for shady affiliates to literally manufacture not only new “leads,” but also continue to recycle the same garbage and resell it to numerous other buyers. We are part of a new breed of what I would call “QualTech”-type companies that can now give online marketers insight for the first time about the entire life span of an online lead.

iDatafy touts its ability to combat “paid to answer” fraud. Can you explain what this is?
We have uncovered numerous examples of online leads that have been independently reported to our bad-lead consortium by dozens of different schools. They all have one thing in common: We have verified through call center partners that these leads have actually told enrollment counselors that they are interested in starting a degree program. The problem is they never start. In fact, many of these fraudsters are using multiple aliases at the same time.

iDatafyIn our recent white paper “The Curious Case of TallyTrace,” we discovered that one woman had been using at least 18 different email aliases and telling schools for the past five years that she wanted to enroll in one of their programs. These fraudsters are literally getting “paid to answer” the phone and pretend to be an interested prospective student. It’s worth it because affiliates can be getting paid, $20, $40 or even more for these data leads or hot transfer calls.

Can you take us through an end-to-end example of how iDatafy handles a fraudulent affiliate marketing lead?
When you are using the right tools, or data lens per se, it becomes very obvious and easy to stop. We stop affiliate marketing fraud by helping companies see that a “new” lead possibly has a secret history of being recycled. We only accept bad-lead contributions from certified lead-buyer partners, but we let both lead buyers and sellers pre-screen their new leads against the same database to show them whether multiple other lead buyers have already claimed that the lead was bad for them. Specifically, we key off the provided phone number and/or email address in our process. If someone checks a new lead’s email address with us and sees that it has already been reported 30 times as a bad lead by 30 different schools, then we would not recommend that the person checking the lead buys it. If they check another lead and the email address has no bad marks in our database, then we would recommend they buy it and pursue it aggressively.

What does the future hold for affiliate marketing fraud? Do you expect to see new tactics in the coming year or so?
I’d expect to see affiliate fraudsters scramble to try to sell their bogus leads to the least-equipped or least-prepared buyers. The lead quality will rapidly deteriorate even further for companies not leveraging the latest in third-party quality solutions, whereas the companies that have invested in proactively shielding themselves from these fraudsters will be able to buy even more leads than before because they can do so with confidence knowing they are not buying junk. I encourage your readers to look at companies such as PerformLine, ActiveProspect, Datamark and LeadiD to see the type of value they can provide.

Does iDatafy plan on entering any new verticals in the near future?
Yes, we are in the midst of building out a lending vertical specific to our bad-lead database. We have also created a product solution called StudentReview, which is a separate patent-pending contributory database that is focused on proactively identifying financial aid fraud rings that target our nation’s higher-education institutions.


By Jason Hahn

The post The Fight Against Affiliate Marketing Fraud in Higher Ed: Q&A with iDatafy appeared first on DM Confidential.


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