The IP fraud score is one of the most important factors used by anti-fraud providers to prevent and detect online payment fraud. It’s used to analyze the risk of a user’s transaction and determine whether to accept or reject it. It also identifies the potential for future chargebacks.
The risk score is calculated by examining the IP’s recent reputation, abuse history and other relevant data. Premium account features provide a more detailed look into the risk of a user, click or transaction using data like Geo location, ISP, device details, recent reputation activity and overall fraud score.
Risk scores are based on the likelihood that an IP address will be associated with malicious activity from threat intelligence sources and can range from 1 to 100. The higher the risk score, the more likely that the IP is a rogue or bot.
Reputation services monitor online behavior and abuse reports for each individual IP address to identify bad actors, allowing companies to blacklist them as soon as they notice suspicious behavior. This helps protect their customers from cybercriminals and other malicious actors while also improving the overall experience for customers.
These services can be a powerful tool for preventing fraud and reducing the risk of chargebacks. They can also help to identify unauthorized account takeover, where fraudsters use stolen credit card information and bank accounts to make purchases.
Fraudsters often use proxies and VPNs to hide their real IP addresses, which makes it difficult for businesses to identify and block transactions based on the IP address alone. This is particularly true when it comes to identifying fraudsters who are located outside the United States.
This type of detection can be very helpful, as it can flag fraudulent activity when a customer makes a purchase on a site that sells products to people who live in a different country. However, it’s not 100% accurate and isn’t infallible.
Proxies and VPNs are the most common methods that fraudsters use to mask their IPs and evade detection by a merchant’s fraud prevention solution. They’re easy to setup and can be done in a matter of minutes.
Other ways that fraudsters try to conceal their identities are by using public WiFi networks and The Onion Router, also known as Tor. These are less sophisticated methods and can also be easily thwarted by merchants with proxy piercing technology.
In addition to detecting IPs, IP Reputation services can also help businesses identify high-risk users, fake clicks and chargebacks. Using this information, businesses can more accurately predict the likelihood of a transaction being fraudulent or a chargeback and make more informed decisions about when to accept or reject transactions.
Reputation and Fraud Prevention Solutions
IP reputation is a vital component of any effective fraud and chargeback prevention strategy. It can help organizations identify suspicious users and spoof digital fingerprints to prevent chargebacks.
Reputation scores can also be used to help identify ecommerce fraudsters who repeatedly commit malicious acts on the same devices or computers. This information can then be used by businesses to proactively prevent further attacks and increase profitability.