ISP warning on fraudulent online competition

A “massive increase” of fraudulent multiple entries is threatening online competitions run by brands, according to the Institute of Sales Promotion (ISP).

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Online competitions make it easy for individuals to enter from multiple email addresses or “hack” competitions using the same methods hackers use to hit sites with a “denial of service” attack.

In some cases, online contests have been cancelled due to high levels of fraudulent entries.

The ISP says in some instances, thousands of online entries have been traced back to single individuals.

Philip Circus, the ISP’s director of legal affairs, says: “We have seen cases where individuals have entered hundreds if not thousands of times and have won multiple prizes, which they have then sold off on online auction sites such as eBay. This raises two issues. First, other people are discouraged from entering; and second, it undermines the commercial value of the data being collected.”

The ISP is warning members to be aware of the risks posed by multiple entries and has set up a working party to advise marketers setting up online competitions to make the terms and conditions absolutely clear and to warn that individuals found to be using hack tactics will be disqualified and barred from future competitions.

Online competition portal Loquax warned its users of the risk of automated competitions in January 2008 citing one competition organiser receiving 600 entries from email addresses following the same format in 12 hours, compared to the usual entry rate of several hundred over a month.

David Carr, head of interactive at Chemistry Communications Group and an advisory director to the ISP’s board, says: “There is a moral issue but also a business one, which is that many online promotions are driven by customer acquisition and data collection, and multiple entries or voids can seriously affect the quality of initial data and key performance indicators.”

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