IP fraud is one of the most common forms of cybercrime. It primarily involves fake and compromised internet protocol (IP) addresses that fraudsters use to make transactions or access accounts. It is also a major cause of ecommerce losses.
Despite the fact that IP addresses are the basis of many modern internet services and devices, they are rarely sufficient to determine whether a user is a threat actor or a legitimate customer. For that reason, organizations must rely on other data to accurately assess their risk and protect themselves against a wide range of threats.
An IP fraud score, in particular, can be used by businesses to help them better identify and manage IP fraud. This type of fraud is a growing issue for online retailers as more and more consumers purchase goods and services from a smartphone or tablet.
The IP fraud score is a type of risk score that assesses the probability that a transaction will be fraudulent. The score takes into account various factors, such as IP address of the buyer and transaction amount.
Fraud scores are a vital component of any fraud prevention strategy and are commonly used to flag and approve transactions automatically, or reject them altogether. They are typically based on historical fraud data and risk parameters set by the financial institution.
In addition to using IP fraud scores, merchants can also leverage IP reputation and blacklisting tools. This type of tool helps merchants prevent unauthorized access to their systems by blocking suspicious IP addresses from connecting to their networks.
Reputation tools can detect IP addresses that have been spoofed and use them to launch attacks against websites, send malicious email messages or perform other types of malicious activities. They are also helpful in identifying IPs that belong to bots or have been associated with a variety of abusive behaviors, including account takeover fraud and account hijacking.
These tools are typically bundled with IP verification tools that detect IPs with suspicious activity and help prevent them from being used by fraudsters. They also include features that allow companies to analyze user and transaction data, generate real-time fraud scores and over 25 risk analysis data points to analyze how likely a customer or visitor is to engage in fraudulent behavior.
IP Verification and Geolocation
An IP verification tool uses a combination of geographical information and IP data to identify and verify the location of an individual’s computer, phone, or other device. This information can be used by organizations to curate advertising and marketing, provide fraud detection services, track a consumer’s demographic profile for targeting and retargeting strategies, and assist 9-1-1 dispatchers with their location searches.
Moreover, some companies even use this information to trace the location of an individual’s internet service provider, which is useful for analyzing traffic routing patterns and finding out which servers are being used for fraud.
A networked approach to fraud detection – trusted by Fortune 500s and the Internet’s top brands worldwide, adaptable anti-fraud software filters abusive users and fraudulent payments in real time before they negatively impact your business.