Amazon Unlimited Fraud
Amazon Unlimited is an all-you-can-read service. You pay one price and can read anything that’s in the program. Amazon pays authors out of a fixed pool, on the basis of how many people read their books. More interestingly, it pays by the page. An author makes more money if someone reads his book through to page 200 than if they give up at page 50, and even more if they make it through to the end. This makes sense; it doesn’t pay authors for books people download but don’t read, or read the first few pages of and then decide not to read the rest.
This payment structure requires surveillance, and the Kindle does watch people as they read. The problem is that the Kindle doesn’t know if the reader actually reads the book—only what page they’re on. So Kindle Unlimited records the furthest page the reader synched, and pays based on that.
This opens up the possibility for fraud. If an author can create a thousand-page book and trick the reader into reading page 1,000, he gets paid the maximum. Scam authors are doing this through a variety of tricks.
What’s interesting is that while Amazon is definitely concerned about this kind of fraud, it doesn’t affect its bottom line. The fixed payment pool doesn’t change; just who gets how much of it does.
EDITED TO ADD: John Scalzi comments.