The Fraud Examiner

Ad Fraud: How Phony Leads Pose a Financial Threat to Organizations

Rich Kahn 
Co-Founder and CEO of and

Based on the name alone, it seems like ad fraud only affects those in the digital advertising and marketing industries — but that could not be further from the truth. If a business has any online presence, including websites or social media accounts, it could be a prime target for ad fraudsters.


One specific digital element poses a particularly heavy threat — the lead generation form. Found on website landing pages, lead generation forms allow companies to quickly gather information about potential clients by offering some type of incentive. For instance, someone browsing an insurance website might fill out a form to get a quote, which often requires them to share personal identifiable information (PII), such as an email address or phone number. Once submitted, the insurance company stores the data and marks the person as a potential lead, sometimes following up later with a phone call or email.


Legitimate businesses make a point to comply with the Telephone Consumer Protection Act (TCPA), a statute that prohibits marketers from contacting consumers with unsolicited messages via telephone, fax or email without prior explicit consent. The penalties for breaking compliance are steep — each unsolicited message may carry a $500 to $1,500 fine.


To avoid legal trouble, smart companies ask consumers for clear consent to receive promotional and/or service-based messaging before submitting a form. Others run their leads through third-party validation services to make sure any submitted data is real and accurate. Unfortunately, even with proper measures in place, many companies still find themselves in hot water thanks to fraudsters operating in the digital advertising world.


Harming companies and consumers

No matter how they are submitted, phony leads pose a financial threat to companies, should marketers reach out to unvetted leads. It only takes one unsolicited message to spark a TCPA firestorm, brand safety concerns or wasted marketing spend.


Pretend you are a credit card company that uses online form fills to generate leads. You notice a man named Mark submitted an application for a credit card. He also clicked the box indicating his consent to be contacted by your company. Mark appears to be the perfect candidate for a new credit card, so you have one of your reps give him a call.


Mark picks up the phone and confirms that his name and phone number are correct, but when asked about his credit card application, he’s confused. According to him, he did not fill out a form, let alone visit your website. As such, he never really consented to the phone call, meaning your company just broke TCPA compliance. If Mark decides to file a complaint, your business could face monetary fines.


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