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If you run an affiliate program, be alert! There's a new scam around that could cost you not only lost revenue, but also your merchant account.

Let me start from the beginning of this sad and sorry tale ...

I've had an affiliate program for the past two years to sell my writing courses. It's been putt

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

ering along quite nicely with more than 100 affiliates. And while only a few are making significant sales, that's the way most programs work, isn't it? Twenty percent of your affiliates bring in 80% of your sales.

Recently, one of my newer affiliates started putting through regular sales; at first two

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

r three a week, then four or five, then one every day. I was delighted!

Wow! I thought, if I could find out how to encourage all my other affiliates to make these sales, the sky's the limit! And off I went into a little fantasy world where I multiplied the number of affiliates by the number of sales a

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

ay and the profit I was making and after a year I'd have ... Well, I'm sure you've indulged in the same daydreams, haven't you?

Fast forward to the Friday before Christmas, when the postie arrived and left two letters from my bank ... Muttering to myself about the waste and why couldn't they put both l

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

tters into one envelope, I opened the first expecting to find a bank statement, only to discover to my horror, one of those "please explain" letters.

It appeared that one of my credit card transactions had been queried. I've had my merchant account since 1998 and in all that time, have had only two pre

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

ious letters like this (and both were resolved when we found that the queries were the result of buyers not being aware of my business name).

Feeling somewhat less than Christmassy, I opened the second letter to find that it was yet another "please explain." Two in one day after two in seven years was

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

real shock!

Some quick investigating unearthed the culprit: my active new affiliate was running a scam using stolen credit card numbers! He'd put an order through using his affiliate link and the stolen credit card. My automatic program sent out the download instructions to the email address he entere

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

, and I received notification of another sale by an affiliate. There was no reason to be suspicious or concerned, so I paid him his commission at the end of the first month.

And I not only lost that money, I now also risk losing my merchant account.

I've had a number of conversations with my bank, and

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

it seems that if 5% of any month's transactions are queried for any merchant, alarm bells go off for the credit card companies and they make life difficult for the banks. And we poor merchants are at the bottom of this food chain.

Be Suspicious If:

1. The order is placed through an affiliate from any

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

f these countries:

• Romania • Indonesia
• Singapore
• Ghana
• Ukraine
• Uganda
• Nigeria
• Hungary
• Belarus
• Estonia
• Latvia
• Lithuania
• Slovak Republic
• Russia
• Yugoslavia
• Macedonia
• Phillipines

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

• Thailand
• Malaysia

2. The shipping address is different from the billing address

3. The email address is from a free account

4. Email to the "customer" bounces

5. You receive orders for multiple copies of one product (especially a digital product)

6. The shopper isn't concerned about what

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

it costs to ship the product or how long it will take to ship

STEPS TO AVOID PROBLEMS

1. Always send a confirmation email to the address given. A fraudulent account will either bounce, or you won't get a response because the fraudster will know you're on to the scam.

You can also use this reverse ema

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

l tool to check that details given tally: http://www.freeality.com/finde.htm

2. If you do get a response, ask for additional details (perhaps the expiry date or bank name on the card). Honest customers won't be concerned, but fraudsters will realise you suspect them and won't respond. Tear up those ord

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

rs!

3. If there's a phone number on your order form, call the number to confirm the order.

4. Record the IP address of all orders placed and check them here: http://www.arin.net/whois/ Beware of any that are placed through the "Asia Pacific Network Information Center."

5. Check the Bank Identificatio

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

Number (BIN) to determine if the credit card holder and the issuing bank for the credit card are located in the same country: http://all-nettools.com/toolbox,financial Enter the first six digits on the card and you'll see the bank name, card type and a 3-character code for the country.

LESSONS

This

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

s what I've learnt from my experience:

1. Don't trust anyone! I was naive in thinking that just because I'd spent seven years dealing with honest people on the Internet that everyone would be honest. They're not. I know I've been incredibly lucky up to this point, and I mourn the loss of trust.

2. Mak

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

sure you get lots of personal details from your affiliates and don't have a program that lets them sign up automatically. You can usually set your program to have affiliates pending until you've done a thorough check on them.

Beware of email addresses at free accounts. I don't mean to cast aspersions

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

n anyone here, but the ones I'll be suspicious of in future are any netzero.net, netzero.com, walla.com or juno.com accounts. In fact, I think it would be sensible to require all affiliates to have their own domains.

3. Be prepared to have to convince your bank that you've done all these background che

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

ks on your affiliates. Apparently, the Big Boys at the pointy end of town have to spend hundreds of thousands of dollars a year to have accountants audit their merchant accounts for them, and the banks expect nothing less from their smaller customers.

4. Again, I don't mean to generalise, but in your o

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

n interests, don't accept any affiliates using an address from any of the countries in the list above without doing very thorough checks. According to my source in the bank, many current credit card scams and frauds are originating from these places.

Mine was an expensive lesson, but one I won't forget

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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