Inside an affiliate spam program for pharmaceuticals

Summary:Bargaining with your health doesn't just mean you're heading for a shorter life expectancy, but also, increases the chances that you will either get scammed in the process, or have to pay more in the long-term while dealing with the health issues arising from using expired pharmaceutical with unverifiable origins, you bargained for at the first place.

Affiliate Pharmaceutical Program
Bargaining with your health doesn't just mean you're heading for a shorter life expectancy, but also, increases the chances that you will either get scammed in the process, or have to pay more in the long-term while dealing with the health issues arising from using expired pharmaceutical with unverifiable origins, you bargained for at the first place.

Just like vendors of rogue security software and system utilities software contributing to the increase of cybercrime activities due to the high payout rates enticing the affiliate network's participants to spam, engage in blackhat SEO and SQL inject sites to redirect the visitors to the scam domains, pharmaceutical affiliate programs do exactly the same by allowing spamming, blackhat SEO, botnet traffic through redirects, and due to high amounts of money they make - directly advertise the scam sites on the major search engines.

Affiliate Pharmaceutical Program
Out of the close to a hundred (100) unique pharmaceutical spam affiliate programs currently operating, let's find out what is driving the increasing levels of pharmaceutical spam by taking an inside peek at such a program operating since 2003, whose advertisements speak for themselves in terms of revenues - "Around 50 Americans (85% of their sales) purchase pharmaceuticals from their affiliates on an hourly basis".

Affiliate Pharmaceutical Program
The underground ecosystem for pharmaceutical spam is analogical to that of legitimate online shops, since it's successfully scaling just like they do - through affiliate based programs where the scammers share revenues with the participants who will undertake a great deal of illegal activities while earning high commissions in the process.

It's also worth pointing out that despite the program's claims that it doesn't endorses spam and traffic coming from botnets on its web page, some of the program's managers have exatly the opposite attitude across multiple forums - they don't mind. Here's how the process works :

Affiliate Pharmaceutical Program
1. Affiliates will receive an assigned code upon signing up for the affiliate program. That code is used to track all sales to adequately compensate affiliates. The code must be used as provided. Any altering of the code may result in inaccurate tracking and in some cases may constitute fraud. Affiliates are only allowed to use approved advertising banners and materials. Any affiliate wishing to create their own advertising materials must get explicit permission to do so in advance of using any such materials. Not gaining permission to do so may be grounds for termination from the program and forfeiture of any monies due

Affiliate Pharmaceutical Program
2. Payouts will be made weekly on Tuesday for the week before previous. I.e., all earnings from monday to sunday of 1st week would be paid on the Tuesday of the 3rd week. The minimum payout is $100. If the minimum is not reached during the pay period, the amount will be rolled over until minimum is made. We pay out by bank wire transfers, WebMoney, and Fethard. The wire cost is $15. Wire is free for payments above $1000

Affiliate Pharmaceutical Program
3. Affiliates may not make any unfounded claims about our product, company, website, affiliate program or transactions. Affiliates also may not make any false claims regarding prices

4. Any means of attempting to cheat our program or our customers in any way will result in immediate termination with forfeiture of all monies due. Anyone terminated from our program for non-compliance of our terms will also be unable to participate in any other promotion or affiliate program we own and or operate

Affiliate Pharmaceutical Program
So once you've been approved as an affiliate and receive your unique tracking code, you're free to choose the pharmaceutical products, pick up the creative and choose of the many templates for online pharmacy shops, then start driving traffic to them. Some affiliate programs add value to the registration process by introducing ratio calculators in order to make it easier for new participants to calculate their earnings based on the selling price that they choose for the item. Pretty simple, and that's the problem, since anything required for the participant to drive traffic and monetize it, can be, and is easily outsourced.

Affiliate Pharmaceutical Program
What about the big picture? MarkMonitor's Summer 2008 Brandjacking Index, covers in-depth the proliferation of pharmaceutical scam sites, and points out that despite the fact that the total number of unique online pharmacies is decreasing, the traffic to the remaining ones triples due to the combination of traffic acquisition tactics applied by the participants of the affiliate programs. Here are some of the key summary points regarding their analysis of the current situation :

  • Of the 2,986 online pharmacies studied, only two are Verified Internet Pharmacy Practice Sites (VIPPS), the industry credential that assures consumers of legitimate online pharmacy operations
  • More than one-third of the online pharmacies in the study generate enough traffic to merit an Alexa ranking. Each of these sites sees an average of 99,000 visitors daily, more than triple the daily visitors noted in 2007. Using industry statistics for traffic conversion and average order sizes, MarkMonitor estimates that this traffic converts to $12 billion in annual sales for the six drug brands studied, an increase from the 2007 estimate of $4 billion
  • Marketers for these pharmacies and sites are becoming increasingly aggressive. MarkMonitor estimates brandjackers spend $26 million annually for search advertising using only those six keywords
  • Representative sampling of pricing for one popular drug brand shows an 85% average price discount at illicit pharmacies when compared to certified pharmacies
  • 64 percent of these 2,986 pharmacies do not secure customer data, putting consumers’ identity information at risk. This number has grown compared to 50 percent last year
  • 49 percent of the 2,986 pharmacies were hosted in the U.S., followed by the U.K., which hosted 12 percent, and Germany, which hosted 9 percent
  • Exchange sites that sell pharmaceuticals in bulk quantities by the pill as well as sell active pharmaceutical ingredients (APIs) risk corrupting the overall drug supply chain. Analysis of just 40 listings on exchange and trade sites shows a $30 million wholesale market for the six brands studied
  • 60 percent of pharmacies identified in 2007 are still operating, and 59 percent of online exchange listings identified in 2007 remain active

Affiliate Pharmaceutical Program
With more surveys indicating that users are buying from spammers, just ask yourself the following before purchasing pharmaceuticals in this particular case - how is it possible that the vendor is offering 45% payout rate and up to 85% average price discount compared to legitimate pharmacies? Pretty simple, since you're never going to receive anything else from them, but a a billing entry on your bank statement :

"Here is an example of one online pharmacy that is labeled as Canadian but hosted in the Russian Federation, according to its IP address. Last year, it listed a Los Angeles area code, but this year the company shows a Texas phone number. We made a purchase from this website and our credit card statement reflects an Israeli merchant account; as of our publication date, the drugs have not been delivered. No matter where its real location is, it continues to display faked credentials, and when you telephone them, a heavily-accented Russian voice invites you to leave a message."

Affiliate Pharmaceutical Program
And even if you're lucky enough to receive something, using the prescription drugs obtained without a prescription when shipped from India, might not be such a good idea.

With the ever-decreasing costs of spamming due to the efficiencies achieved by the managed spamming providers, the very few purchases out of the hundreds of thousands of spammed potential customers will remain sufficient revenue in order for spammers to break-even, and profit out of these very few people.

Images (excluding the affiliate program screenshots) courtesy of MarkMonitor, Spamdontbuyit.org and Modern Life.

Topics: Security, Banking, Health, India, Malware, Outsourcing

About

Dancho Danchev is an independent security consultant and cyber threats analyst, with extensive experience in open source intelligence gathering, and cybercrime incident response. He's been an active security blogger since 2007, and maintains a popular security blog sharing real-time threats intelligence data with the rest of the community... Full Bio

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