Advertiser Accuses Reddit of Allowing ‘Click-Through Fraud’ for Search Ads

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An AI stock trading platform alleges in a proposed class action lawsuit that Reddit has failed to address “click-through fraud,” which has caused advertisers to pay for fraudulent ad clicks that lack corresponding, verifiable online traffic. 

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The 11-page Reddit lawsuit defines “click-through fraud” as an industry term for clicks on a search advertisement “with no intention of doing business with the advertiser and for some purpose other than that contemplated by the posted ad.” Per the suit, click-through fraudsters exploit pay-per-click online advertising to increase the fees paid by competitors and boost the placement of their own ads.

The case explains that a fraudster will often utilize software capable of automatically clicking on an ad hundreds or thousands of times. Per the suit, this practice can be prevented by tracking the identity and/or source of the clicks on an ad and the frequency of such activity.

The case alleges that although Reddit began to charge the plaintiff business for clicks on advertisements, the company’s system did not log traffic that corresponded to the clicks it was charged for. The company contends that  Reddit is in a unique position to track click-through fraud that comes from its own advertising program given that the ads from the program are displayed on Reddit itself.

According to the case, the plaintiff contacted Reddit to request the click logs that would show associated IP addresses for the purported ad clicks, but Reddit provided only clicks logs without IP addresses, claiming it was not able to provide that data. The plaintiff business alleges Reddit is being untruthful.

“Plaintiff is informed and believes that representation is false, because Reddit has to know where traffic was coming from for security and monitoring purposes,” the lawsuit states.

Alternatively, the filing continues, Reddit has thus failed to provide “minimal levels of security and monitoring of clicks on its platform, in violation of its duties.”

The Reddit lawsuit looks to cover all United States residents who, from May 8, 2020 to the date that notice is sent to potential class members, paid Reddit for advertisements.

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