New online mob rings have been created NEW YORK, March 26, 2009 (AllPayNews.com) — Today, Vizi CEO Pesach Lattin posted a video on YouTube - http://www.youtube.com/watch?v=G5mYR5lqXTk - showing an example of a massive impression fraud operation that has cost advertising networks millions of dollars. In this video an advertisement is loaded by a rogue publisher, but in the background a special script created by a fraud-ring loads over 1000 different “hidden” advertisements, attempts to install an https hijack on the computer, then creates a bunch of fake fraudulent clicks to various search engines.
This is the first time any major network has shown examples of catching major fraud on their network and come out to attack and take on advertising fraud directly. After noticing that the publisher was committing fraud for a few days, Lattin decided to take steps to track and monitor this and several other questionable publishers until he had the evidence to show exactly what was happening.
“I’m completely sick and tired of much of the industry’s response to this,” said Lattin. “Fraud coming from advertisers and publishers is rampant throughout the industry, and some networks are ignoring it as long as they make money.” According to Lattin, in the last six months these problems in interactive advertising have become even more severe as people become desperate about the economy. Examples his company has had to deal with in the last two months alone include:
* Advertisers inserting malicious code into banners that redirect visitors often in the middle of the night to other sites.
* Advertisers switching up code and putting in pornographic material.
* Publisher “selling” Vizi’s ad code to fraud rings in order to inflate impressions and income, which often then show back up on Vizi through other advertiser networks.
* Large amount of publisher applications providing offshore bank information, providing fake Social Security information.
* Attempted hacking into adserving technology from Chinese IPs.
“We have been extremely honest with our publisher partners and advertisers about the issues we face - and we have lost some publishers because of it,” said Lattin, “but I believe that this is the right thing to do in solving this huge problem facing the industry. We need to address it now and get other partners onboard immediately or it will continue to grow.”
Jennine Rexon, the owner of Rex Direct Net, one of the top Internet marketing companies, is happy to be part of the fight against fraud on behalf her clients: “Fraud is killing our industry in a time where we most need advertisers to trust the technology. Finding and building new solutions that protect clients is essential for the industry to grow.” Rex Direct Net has had to take drastic steps to find fraudsters who have created some of the most ingenious techniques to inflate revenue. “It’s really amazing what we have found,” exclaimed Rexon. “Some of the brightest minds out around the globe today seem to be creating solutions to defraud interactive adverting!”
“Online Advertising Fraud is a horrendous problem that hurts every network, publisher and advertiser and must be stopped,” said Bob Regular, publisher of ADOTAS, a top interactive advertising publication. “If allowed to continue it will permanently impact the integrity of online advertising.”
Vizi is one of the largest and first members of the RightMedia exchange, having been a member since 2005. “We have taken steps that blocked almost 40% of all the ads coming from the exchange and terminated over 20 partnerships with other advertising networks and brokers that did not have the technology to monitor their advertising or publishers,” said Lattin.
Vizi has forwarded all evidence of the fraud to the FBI and several jurisdictions, and believes based on what has been provided several cases will be prosecuted in the next several months. “As soon as the industry starts seeing people being arrested for fraud, expect more and more networks to start cleaning up their networks,” stated Lattin. He notes that background checks on some of the people involved in these rings show that some of the people involved are career criminals: “This is the new mafia … online, and they are making more money than the Godfather could have ever dreamed of.”
“This is not an issue of just million-dollar companies being defrauded but an issue that is affecting small businesses,” reminded Lattin. “There are mom-and-pop companies that are barely making it and then spend a few thousand dollars that they can’t afford on interactive advertising, because they were told it would grow their business. Instead of getting visitors, they were cheated and have no idea it even happened.”
Pesach Lattin is a well-known interactive advertising expert who has published many articles on issues in the industry. He is the creator of Vizi Inc., a top-tier advertising network. He has worked with both federal and local law enforcement on issues of computer crime.
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