Hi-

If a 3rd-party billing company provides a software tool that manages
credit card authorization and billing, affiliate tracking, affiliate
payments, and also tracks statistics related to number of visitors and
sales referred by a particular affiliate for a website owner, can the
3rd-party billing company be held accountable for fraudulent activity
by the website owner if the website owner uses the billing company's
tool to facilitate the fraud? In this case the fraud involves
underreporting commissions due to affiliates.

More specifically, the 3rd-party billing company's tool includes settings that:

-allow the website owner to "turn off" the tracking of commissions to
the affiliate, without the affiliate being made aware of the change

-allow the website owner to modify pending transactions, so that the
affiliate does not receive credit for the transaction

The 3rd-party billing company is aware of the fact that their system
allows this type of fraudulent activity, but is likely to claim that
the affiliate needs to deal with the website owner in instances where
fraud has been committed, even though:

-the affiliate does not have access to the data within the 3rd-party
system that would allow for the discovery of fraudulent activities

-initial sign-up of each new affiliates happens within the 3rd-party
billing system (selected information about the affiliate is later
forwarded to the website owner)

-the 3rd-party billing company charges the affiliate for various
"processing fees" associated with managing transaction data

-affiliate payments are paid by the 3rd-party billing company
(3rd-party billing company also pays website owner his share;
3rd-party billing company also takes a cut of every transaction,
regardless of whether or not an affiliate commission is paid)

-the web site owner represents that usage of a 3rd-party billing
company protects against fraud, since the 3rd-party is the only one
tracking statistics and handling the money

So can the 3rd-party billing company get away with this? Or rather, do
I have grounds to sue them as well as the website owner? Since there
are tens of thousands of affiliates being paid via the 3rd-party
system, would a class-action be possible?