IP Fraud Score Explained

IP Fraud Score Explained

As more and more consumers make purchases online, businesses need to be able to detect fraud before it occurs. Whether it’s from a stolen card or a fake account, fraudulent transactions can be costly to businesses and cause reputation damage.

Merchants can mitigate risk using a IP fraud score model that allows them to determine whether a particular transaction is a high-risk one and then deny it if they think it’s unsafe. However, these models aren’t decision makers and don’t offer chargeback guarantees.

Risk Analysis and Threat Detection

Using AI to automatically analyze user data and identify suspicious behaviors helps organizations more effectively prevent fraud and minimize revenue loss. The software can perform real-time lookups to quickly determine how risky a user, click, or transaction is based on over 20 relevant data points including geo location data, ISP, connection type, device details, recent reputation activity, overall fraud score, status as a proxy, VPN, or TOR connection, abuse velocity, and other similar data points.

Understanding IP Fraud Scores: What They Are and How They Can Help Protect Your Business

Depending on the products or categories a merchant sells, it can be important to weight data to identify certain product lines and classes that are more susceptible to fraud. A merchant may wish to assign higher fraud scores to specific high-risk items such as expensive televisions and electronics, sports shoes, or aftermarket auto parts.

Flexibility in Risk Mitigation

Once a business has determined which risk factors they want to use to score customers, they can customize the system and implement it for current and future clients at once. This allows them to create a system that best suits their needs and prevents unwelcome transactions from taking place.