What are Fake Leads and How to Identify them

Originally written at Anura

Updated on: October 24, 2023

Generating quality leads is crucial for any industry. Fake leads, a form of lead generation fraud, can divert resources and harm your reputation. They misguide marketing efforts, diverting funds to unproductive channels like fraudulent affiliates or ineffective PPC campaigns.

Contacting non-existent customers wastes valuable resources and damages your brand image. Unknowingly reaching out to fraudulent leads can lead to legal consequences under laws like the Telephone Consumer Protection Act (TCPA). Falling victim to fake leads is a serious issue with potential financial and reputational costs that cannot be overlooked.

What Are Fake Leads?

Fake leads are leads that provide false information, often submitted to bypass giving accurate details on a website form. This deceptive practice is widespread, especially in human fraud farms. These fraud farms operate in cyber factories, employing numerous individuals, usually in developing countries, dedicated to ad fraud, with fake lead generation being a common tactic.

Their process involves visiting websites and mimicking genuine use by exploring the site before signing up for memberships, joining mailing lists, or requesting consultation calls. Initially, fake leads may be obvious, featuring obviously false information like phone numbers consisting entirely of 1s. However, fraudsters are becoming more sophisticated, using genuine user data available online, making it harder to detect these fraudulent leads during back-end security checks.

How Can Fake Leads Damage Your Company?

The five key ways in which fake leads are giving fraudsters unprecedented opportunities to hurt your company are:

1. Budget ImpactThe most obvious way fake leads can hurt you is by directly taking from your marketing budget. Fake leads directly deplete your marketing budget, particularly in pay-per-click or pay-per-lead campaigns. The accumulation of these fake leads can strain even well-run campaigns, hindering sales growth as the numbers of fake leads escalate.
2. MistargetingFake leads can distort your targeting efforts by providing inaccurate data points for building buyer personas. This misalignment can result in ads reaching an irrelevant audience that won't convert, adversely affecting your conversion rates.
3. Wasted Time and MoneyEngaging with leads, especially fake ones, is resource-intensive and often unproductive. Time and effort are wasted on unresponsive or irrelevant leads, hampering productivity and efficiency.
4. Damaged ReputationA company's reputation is vital in many industries. Contacting individuals unsolicited can tarnish your reputation and lead to complaints. Acquiring a bad reputation can have long-term consequences, making it challenging for any company to survive.
5. Fines and Legal CostsFollowing up on leads without explicit consent can lead to TCPA compliance issues and fines of up to $1,500 per call. These penalties not only impact finances but also exacerbate reputational damage, negatively affecting even the most reputable companies.

How Can You Identify Fake Leads?

With so much at stake, it's crucial to detect fake leads recognize when you're falling prey to widespread lead generation fraud, and take action to stop it. Fake leads are relatively easy to identify after you've made contact. Signs like confused or irritated responses, or being blocked, should raise red flags, signaling a potential issue.

?However, this approach is reactive and often too late. Discovering fake leads after the fact means you've already invested time and resources in a dead end. Despite apologies and efforts to make amends, your reputation may suffer or even lead to legal troubles.

?A proactive strategy is essential. Detect false leads before reaching out to them by analyzing your traffic sources in real time. Though this may seem overwhelming, leveraging a professional ad fraud solution like Anura can make it effortless. Anura can spot fake leads as they occur, alleviating the pain and shielding you from damage. This lets you focus on what you do best—converting genuine leads.

?For more details on managing fake leads, identifying potential lead fraud, or discussing how to safeguard your campaigns, reach out for a free trial with an Anura expert today.