IP scoring for fraud prevention is a powerful way to detect suspicious activities that can result in costly chargebacks or customer distrust. It can also help businesses streamline their transaction processes by reducing manual review and additional verification requirements, freeing up resources that can be redirected towards more productive activities.

IP Scoring for Fraud Prevention: How to Assess and Protect Against Fraudulent Activity

Fraud score calculations take into account a variety of factors that can indicate the likelihood that a user is perpetrating a fraud or scam. These factors include: – the type of proxy used — some proxies can mask the real location of a device, thus influencing the fraud score – the user’s geolocation — users located in regions known for high cybercrime rates are higher risk – the use of VPNs and emulators — these types of tools hide or alter IP information — adding points to an IP fraud score

These components are then weighted against one another according to their relevance and potential consequences. For example, a user’s IP may be flagged as fraudulent by being found on a blacklist, while the use of a public library might add a point to an IP fraud score because it reveals a likely attempt to remain anonymous. The fraud score is then totaled up to give a final risk rating. Depending on the results, it’s possible to block or challenge transactions or require a password to enter your system. Choosing the right fraud scoring tool for your business requires careful consideration of your risk appetite and the features you’re looking for in a solution.