Quick answer: Affiliate marketing itself is not a scam. The scams sit around it: paid "systems" that promise guaranteed income, schemes that pay for recruiting instead of selling, and programs whose terms let them stop paying you. The warning signs are pressure, upfront fees, vague deductions, and anything nobody will put in writing.
I'm Rihards, founder of Seven Affiliates, and I've spent five years in iGaming. I run an affiliate program, so yes, this is a man who sells umbrellas writing about rain.
You know the advert. A man stands in front of a rented Lamborghini and says he made a fortune in his sleep. [Squints at the number plate. It's a hire company.] This post is about him, and about the quieter problem he distracts you from: perfectly real programs with terms you didn't read.
The 9 red flags at a glance
| # | Red flag | What it usually means |
|---|---|---|
| 1 | Guaranteed income | Likely a scam |
| 2 | You pay to join or "unlock" levels | You are the customer, not the partner |
| 3 | Recruiting pays more than selling | Pyramid warning sign |
| 4 | Pressure to decide today | They don't want you reading anything |
| 5 | Fees nobody will define | Your real share is lower than advertised |
| 6 | Terms can change at any time | Common, so know it's there |
| 7 | Minimum activity rules | Your share can drop if you go quiet |
| 8 | Termination ends your earnings | Read the exit clause before the entrance |
| 9 | Late payments, no replies | The clearest sign of all |
Flags 1 to 4 are scam signs. Flags 5 to 8 are contract terms, and they appear at legitimate programs too. They're on the list because you should see them before you sign, not after.
Is affiliate marketing a scam?
No. Affiliate marketing is a payment model: you send a business a customer, and the business pays you a commission. Nothing in that sentence requires a sports car.
The trouble is what gets sold under the same name. Courses, "coaching" and schemes borrow the label because it sounds like a real job, which it is. So the useful question isn't "is affiliate marketing a scam?" but "who is paying whom here?"
Flags 1 to 4: what do the money-in-your-sleep scams look like?
They look like a promise, a price and a deadline. The US Federal Trade Commission puts it plainly: "if they promise guaranteed income, large returns for little work, or say they have a 'proven system to make money,' it's likely a scam" (FTC consumer alert).
The same alert adds: "No one can guarantee you'll make lots of money with little to no risk. Anyone who does is a scammer." I'd love to add something clever to that. [Checks notes. There is nothing to add.]
| Flag | What the FTC says |
|---|---|
| 1. Guaranteed income | "Promoters make extravagant promises about your earning potential." |
| 2. Paying to stay in | "Distributors buy more products than they want to use or can resell, just to stay active" |
| 3. Recruiting over selling | "Promoters emphasize recruiting new distributors for your sales network as the real way to make money." |
| 4. Pressure | "saying you'll lose the opportunity if you don't act now and discouraging you from taking time to study the company" |
Source: FTC, warning signs of a pyramid scheme. The FTC wrote these about multi-level marketing. They transfer to affiliate "opportunities" almost word for word.
The FTC's advice for the pressure tactic is my favourite line in any government document: "Leave by the nearest exit." A real program will still be there on Thursday. The man with the Lamborghini has to give it back by six.
Has anyone actually been caught doing this?
Yes. In June 2018 the FTC charged the people behind a program called MOBE, short for "My Online Business Education", with "bilking more than $125 million from thousands of consumers" (FTC, June 2018).
The part affiliates should read twice came in March 2020. The FTC went after the people who promoted it. Its press release was headed "Affiliate Marketers to Pay More Than $4 Million", and said they earned commissions "by enticing thousands of consumers to pay as much as $60,000 for MOBE 'mentoring' services" (FTC, March 2020).
| MOBE, from the FTC's releases | Detail |
|---|---|
| What was sold | A business education and "mentoring" program |
| What consumers paid | As much as $60,000 |
| Total the FTC alleged was taken | More than $125 million |
| What promoting affiliates agreed to pay | More than $4 million |
So there are two ways to lose here. You can be the buyer. Or you can be the affiliate who promotes it, which is worse, because then the regulator knows your name.
Flags 5 to 8: what should you look for in the small print?
Four clauses: how fees are defined, whether terms can change, what happens if you go quiet, and what happens when the deal ends. None of these makes a program a scam. They decide how much of the advertised deal you actually keep.
Start with fees. On a revenue share deal, costs are deducted before your percentage is applied. Duncan Garvie, manager at the dispute resolution site ThePOGG, told iGB Affiliate that "there is never any clear definition of what these fees encapsulate, there is no definition of how much the affiliate is being charged in fees" (iGB, April 2021).
In the same article Joonas Karhu, chief business officer at Bojoko, said of programme terms that "every one of them says that the operator can terminate the deal at any time and doesn't need to pay anymore". That is one affiliate's view, stated strongly. It's also a very good reason to find the clause.
| Flag | How a real clause reads | What to ask |
|---|---|---|
| 5. Undefined fees | Deductions listed without amounts | Which costs come off before my share, and how much? |
| 6. Terms can change | "We reserve the right to change any part of this Agreement at any time." | How will I be told, and does it affect existing players? |
| 7. Minimum activity | The right to reduce revenue share for affiliates "who do not deliver at least one new Customer in a given calendar month" | Is there a monthly minimum, and what happens below it? |
| 8. Termination | Payment may end when the agreement does | Do I keep earning on players I already sent? |
The quoted clauses in rows 6 and 7 are from Betfair's published affiliate terms, clauses 1.5 and 5.9. Betfair is a large, legitimate program and these are ordinary clauses. That's the point: they're normal, they're public, and a lot of affiliates never read them.
I know. A blog post telling you to read the terms and conditions. [Pauses for the applause. Hears a chair creak.]
But this is where the money is. Our CPA vs RevShare guide explains how deductions and negative carryover change what a percentage is worth, and the glossary covers the vocabulary.
Flag 9: what do late payments and silence tell you?
That something is wrong, and that it's time to stop sending traffic until it's fixed. Everything else on this list is a risk. A missed payment is a result.
Affiliate Guard Dog, a watchdog site for gambling affiliate programs, builds its certification on exactly this. Its listed requirements include that a program "MUST have affiliate-friendly Terms and Conditions", "MUST pay it's affiliates on time" and "MUST communicate with affiliates in a reasonable amount of time" (Affiliate Guard Dog).
One honest caveat, which the site makes itself: certified programs pay for placement. In its own words, "This IS a paid sponsor at AGD and we do not wish to hide that fact." So treat a badge as a starting point, and the list of requirements as the useful part.
| Sign | What to do |
|---|---|
| Payment is late once, with an explanation | Note the date and the reason |
| Payment is late and nobody replies | Pause new traffic and ask in writing |
| Your numbers don't match your own tracking | Compare click by click before you argue |
| The explanation keeps changing | Move your traffic |
That third row only works if you have numbers of your own. Our postback URL guide covers setting up tracking you control, so a dispute is your data against theirs and not your feeling against theirs.
How do you check an affiliate program before you join?
Ask five questions and insist on written answers. It takes ten minutes, and how a program reacts to being asked tells you nearly as much as what it says.
Then check the rules you'd be promoting under. A program that waves you through with no questions about your traffic isn't being friendly. Our guides to compliance rules and brand bidding cover what a serious program will ask you.
Hold us to the same list
It would be a bit rich to write nine red flags and then ask you to take my word for it. So here is what we say publicly, and you can check the rest by asking.
We're building a curated network of private iGaming offers, which means the detail of each deal is agreed with you directly and not posted on a billboard. Put the five questions above to your account manager before you send a single click, and keep the answers in writing.
| Question | Seven Affiliates |
|---|---|
| Deal types | CPA, RevShare and Hybrid |
| How RevShare is calculated | On NGR, 35% by default |
| Negative carryover | None |
| Brand bidding | Not allowed by default, unless the specific offer explicitly allows it |
| Specific offer terms | Agreed privately with your account manager |
No Lamborghini was rented in the making of this program. If one ever appears in our adverts, you have my permission to leave by the nearest exit.
FAQ
Is affiliate marketing a scam?
No. Affiliate marketing is a legitimate model where a business pays you a commission for customers you send. Scams use the name to sell courses, coaching or recruitment schemes with promises of guaranteed income.
How do you spot an affiliate marketing scam?
Look for guaranteed income claims, a fee to join or unlock higher levels, rewards for recruiting people instead of selling a product, and pressure to decide quickly. The FTC lists these as warning signs.
Should you pay to join an affiliate program?
Normally no. In affiliate marketing the program pays the affiliate. If you are asked to pay for membership, levels or mentoring before you can earn, you are being sold a product.
Can affiliates get in trouble for promoting a scam?
Yes. In March 2020 the FTC announced that affiliate marketers who promoted the MOBE scheme would pay more than $4 million to settle charges over false earnings claims.
What contract terms should an affiliate check?
Check which fees are deducted before your share, whether terms can change at any time, whether there is a minimum activity rule, and whether you keep earning on existing players if the agreement ends.
Want to ask us the five questions? See how the Seven Affiliates iGaming affiliate program works, then apply here.