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Lead Generation Fraud: Here’s 7 Ways To Prevent Bot Leads

  • July 11, 2025
Lead generation fraud can generate fake leads for your business

Lead generation fraud is costing your business more than they realize. 

You can spend thousands on ads, drive what looks like solid pipeline volume, and still come up empty-handed. No conversions. No quality lead data. Just poor campaign performance, and blame passed around between sales, marketing, and customer service teams.

What makes this worse? Fraud isn’t always obvious. It hides inside your Cost per Lead (CPL), masked by vanity metrics and bloated lead lists that seem healthy on paper.

Here are steps you can take to understanding lead generation fraud and how to reduce the volume of bad leads you receive. 

What is lead generation fraud?

Lead generation fraud is when fake, low-quality, or intentionally misleading leads are submitted through paid channels, often for the purpose of stealing ad budget. 

Fraudsters, and even lead generation partners can fill your lead gen forms with junk data. They create fake sessions and populate your fields with throwaway info to trigger payouts.

Lead generation fraud is a type of ad fraud because both involve malicious tactics that steal from your ad spend without delivering real value. However, they differ in where the fraud happens and how it’s executed.

Read more: The biggest cases of ad fraud that we know of.

How does lead generation fraud work?

Lead generation fraud exploits the way advertisers track and reward conversions. Whether it’s via affiliate links, paid search, social campaigns, or display ads, fraudsters insert fraudulent leads and form fills into your funnel and inflate results.

Here’s how lead generation fraud typically works:

  • A bad actor joins an affiliate program or spins up a paid campaign on your behalf
  • They drive traffic through click farms or form bots to simulate interest
  • Fake users complete lead forms using scripts or outsourced labor
  • The platform records conversions, and advertisers pay out
  • Meanwhile, sales teams chase low quality leads that never respond or don’t exist

This is similar to affiliate fraud, and it thrives when no one is looking closely at what happens after the form fill. And unless you’re filtering and validating leads aggressively, it’s easy for this to scale unnoticed.

Read more: How Fraud-as-Service is making online fraud easier than ever.

What are the types of lead generation fraud?

types of lead fraud in campaigns today
types of lead fraud in campaigns today

Lead fraud comes in a few distinct flavors. Each has its own markers, and each damages your business in a different way.

  1. Bot-generated leads
    Automated scripts crawl your forms and create fake leads by dropping false info. These are fast, scalable, and hard to spot unless you’re validating input fields or checking IP behavior.
  2. Affiliate spammers
    New affiliate partners bring in a lot of “leads” after signing on, and get paid for them. But the leads often have abysmal conversion rates, or may never convert at all.
  3. Human fraud farms
    Also known as click farms, these use low-wage workers to manually fill out forms. They bypass CAPTCHA and other low level tactics to protect your lead generation efforts. Then, the actors enter just enough real-sounding info but none of it converts.
  4. Incentivized leads
    Users are bribed with giveaways or gift cards to fill out forms, often with fake lead data. Incentivized clicks and leads are a type of click fraud.
  5. Lead reselling or duplication
    One form submission gets passed to multiple buyers, or the same lead is submitted repeatedly. These may be high quality leads with genuine prospects. But they may never convert.
  6. Card testers
    Some fraudsters fill out your forms just to test stolen credit cards. It looks like a real conversion at first, until the chargebacks roll in. Learn more about carding attacks here.
  7. Algorithm manipulators
    These spammers aren’t after your product. They complete forms purely to signal engagement, hoping to trick ad platforms into sending more paid traffic to their site. 

How much lead generation fraud is there?

Lead generation fraud occurs everywhere, and businesses are at risk of underestimating just how much damage it’s doing.

23% of marketers experienced lead generation fraud in 2020, according to marketing profs. On top of that, the respondents in the same study believed that as much as 25% of their first-party databases could be fake leads. 

Gleanster Research puts the real number much higher than this, stating that only 25% are actually genuine leads that should be handed to your sales team. 

That means of every $100 spent on lead gen, only $25 only actually works for  you. The rest is lost to fraud.

But the problem is bigger than just losing money. Lead generation fraud also distorts your future marketing efforts since you waste resources chasing down invalid leads.

The new compliance risks facing lead generation companies

The Telephone Consumer Protection Act (TCPA) One-to-One consent rule is mandating that businesses need express consent for every telemarketing lead contacted. No more shared lists or generic disclosures.

Even though this doesn’t apply to all lead generation campaigns, it’s a marker of things to come. If your lead funnel doesn’t capture explicit, brand-level consent, you could face fines of up to $1,500 per call.

Even though this rule is temporarily paused, experts expect it to return soon. But that’s just the beginning of compliance regulations your business needs to be aware of.

In California, the CCPA gives users the right to opt out, access, or delete their data. And over in the EU, GDPR requires proof of consent, clear opt-ins, and the right to be forgotten. 

If you’re buying leads that were sold without offering these options, or if your lead gen partners can’t provide proof of permissions, your business could be liable.

Compliance is no longer optional, and it’s not something you can fully outsource. Ask every lead affiliate the hard questions:

  • Do they have timestamped consent?
  • Can they show where the lead came from?
  • Are their privacy practices up to code?

What are the signs of lead generation fraud?

signs to look for in lead generation fraud
signs to look for in lead generation fraud

Our team has spoken with hundreds of clients dealing with fake leads, and here are the biggest signs we’ve noticed.

  • High lead volume, but no customers: Your top-of-funnel looks great, and you may even see high conversion rates to your lead form, but deals aren’t closing. If your CPL looks strong but nothing’s moving down the pipeline, start asking hard questions.
  • Repeated junk data: Another way to easily identify fake leads is fake company names, disposable emails, or leads that bounce immediately in your pipeline. Also, if your CRM is filling up with weird domain names or contact info that looks auto-generated, a closer look is necessary.
  • Same IP addresses or locations: Too many leads from the same IP or geographic region (especially if you don’t advertise there)? You could be dealing with a click farm or botnet.
  • Leads are unresponsive: If a lead claims they don’t recognize your business, don’t answer, or aren’t who they say they are, it’s worth investigating.
  • High bounce rates on lead traffic: If visitors immediately bounce from your landing page before submitting forms, bots or disinterested traffic may be inflating your lead count.

💡 Pro Tip: A high Device-to-IP ratio is a signal for ad fraud. Read more about how Fraud Blocker uses Device-to-IP ratio to flag and block suspicious campaign activity.

How do you prevent lead generation fraud in your business?

Preventing lead generation fraud isn’t about catching every bad actor. It’s about making it harder, more expensive, and less effective for them to target your campaigns. Here’s what that looks like in practice:

    1. Avoid ad network that use AI-based ad placements
      “AI” ad placements very often lack transparency and targeting options. This can encourage more fake leads and bad users in your ad campaigns. Be cautious with Google’s automated campaign types, such as Performance Max and Demand Gen. While these “smart” campaigns are designed to optimize for cost-efficient traffic, they often prioritize low-quality, remnant ad inventory across Google’s networks and provide leads that don’t convert to sales. By reducing spend on these AI-driven placements, you an significantly limit exposure to lead gen fraud.
    2. Track your lead sources separately
      To help detect your fake leads, separate your sources. Use UTMs to help track your leads by channel, per vendor, and per campaign. That way, you’ll know exactly where fraud is sneaking in, and you can cut off the flow without interrupting the entire funnel.
    3. Use honeypot fields and CAPTCHA
      Honeypot fields are hidden inputs bots tend to fill out, but humans never see them. They are very effective in stopping fake leads. Pair that with modern CAPTCHA to reduce automated entries. It’s not foolproof, but it filters out the lowest-effort attacks.
    4. Check your leads in real-time
      Don’t wait until a lead hit your sales pipeline to figure out it’s bogus. Use tools that validate phone numbers, email addresses, and even business records on submission. Services like Zerobounce, Neverbounce or Brightverify can instantly flag suspicious entries. Some platforms will even cross-check LinkedIn or domain presence to detect fabricated identities.
    5. Track conversions after submissions
      Genuine leads are more likely to click confirmation emails, browse your site, and open follow-ups. If you’re not seeing engagement after submission, that’s a sign you’re collecting low intent, potentially fake, leads. Set up a lead scoring model that includes behavioral signals to catch these early.
    6. Set up IP and device fingerprinting
      Use tools that log IP addresses, device IDs , and fingerprint data at your form submission. If 30 different “valuable leads” all come from the same IP or device pattern, then it’s likely spam.
    7. Use fraud detection software
      Click fraud prevention software       like ours, Fraud Blocker, are purpose-built to detect abnormal activity in real time, flagging things like bot behavior, suspicious IP patterns, and traffic spikes.Use this as an automated solution to help monitor what’s happening across campaigns so you don’t have to monitor your traffic manually.

Protect your lead gen campaigns with Fraud Blocker

stop fake leads and wasted ad spend with fraud blocker

If left unchecked, lead fraud becomes a problem for all your marketing efforts, not just the current campaign. It can affect your reporting thereby spreading to future campaigns, waste your budget, and send your sales teams on a wild goose chase. And as new privacy regulations tighten the screws, the cost of ignoring it also keep rising.

The good news is, you don’t need to overhaul your entire funnel. You just need to see what’s really happening inside it.

Fraud Blocker gives you that visibility. Our click fraud prevention platform monitors traffic in real time, flags suspicious behavior before it turns into fake leads, and helps you keep bad actors out of your campaigns.

Try Fraud Blocker with a 7-day free trial and start blocking fake leads from entering your pipeline.

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