The Sizzling Technology

Blog Crimes: The DormRing1 Click Mafia

Imagine the perfect job....  you sit on your behind, surf the web, and just click on the shiny advertisement links you like and get paid handsomely in return.  Now stop imagining, our Chinese friends have already bin there, done that, with the world's biggest and most sophisticated click fraud ring network earning God knows how much per year. To gain just a little insight, they were on a $3 million scam(click to see source) in two weeks before it was discovered by Anchor Intelligence. God knows how much they had already earned before this. This image by anchor intelligence shows the Chinese DormRing1 network.

The ring involved over 200,000 different IPs, and were scamming about 2,000 advertisers. After being caught all the action that could be taken was to stop the money from being paid out, and i agree with techcrunch that you could be sure that DormRing2 has already been set up and is motion already. The innovative creators of the scam are students from the dorms of Shanghai Technology Institute.

According to Anchor Vice President, "We have seen 200 fraud rings, and this one by far trumps them all. I think it is indicative of how sophisticated the click fraud is getting. We are seeing the sheer scale and size of these rings growing."

Click Fraud is basically using deliberate means of clicking on adds to increase the revenue from pay per click advertisements. DormRing1 had more than 1,000 people who set up more than 10,000 websites for thier network. You can be sure that much larger and sophisticated Rings exist in Pakistan and India as well.

This is as per Anchor Intelligence:

These social networks involve a complex set of user access levels. The baseline entrance level is only available by invitation; access to sensitive information is restricted solely to those users who have attained the highest levels. Users with the uppermost levels of access are able to purchase root kits to engage in fraudulent activity and contract out phases of their fraud operations to a large network of willing participants. Users reach higher levels of access in one of two ways: either through a vouching system or by proving themselves as valuable contributors to the network through the provision of some ground level of services (e.g. contracting to create hundreds of accounts on various websites).

DormRing1 was able to use these exclusive social networks to create a division of labor in which all participants at the highest levels shared in a percentage of profits from an operation. The students involved in the ring each set up dozens of bare-bones websites, and successfully registered them with multiple ad networks. The students then hired the services of several botnet controllers to systematically click on ad links that were displayed on these sites. For each ad click, the publisher made a percentage of what the advertiser paid for that click. Through this network, the perpetrators were able to contract money mules (i.e. people with US addresses to which checks can be sent), traffic generators / botnet herders, website template developers, and a host of other service providers. After monetizing these fake websites via fraudulent ad clicks, the perpetrators then wired money to their various contractors.