IP Fraud Scores and Other Fraud Prevention Tools
Businesses around the world face growing risks of online fraud. With merchant losses due to payment fraud predicted to exceed $343 billion by 2023, companies must employ the right tools to detect and prevent the occurrence of such crimes. One such tool is an IP fraud score, which evaluates the likelihood of fraudulent behavior associated with a particular internet-connected device or user.
An IP fraud score uses a variety of data points to create a risk assessment that helps identify potentially malicious activity, such as proxy usage, bots, or association with known criminal activities. These factors are tallied together and assigned a weighting, which is then used to calculate a risk score. The score is then applied to a specific transaction, helping businesses quickly and accurately identify potential fraud.
IP Fraud: Recognizing and Responding to Online Threats
Aside from its ability to help identify fraudulent transactions, an IP fraud score can also be used to help prevent unauthorized access to websites and applications. It can be used to block access, deny or restrict access based on the score, and even blacklist an entire range of IP addresses. However, it’s important to remember that an IP fraud score should be paired with other fraud prevention tools and techniques to create a robust defense against bad actors.
Smart fraudsters know that their IP address is visible, creating a clear motivation to obfuscate or conceal it. They use a variety of methods, including VPNs, SIM-swapping, TOR (The Onion Router), and more to accomplish this task. These and other techniques vary in level of difficulty, sophistication, and effectiveness, but the end result is a tool for masking their true identity and creating a false persona.