IP Risk Scoring and Online Fraud Prevention

IP risk scoring

Online fraud is a multi-billion dollar problem for businesses, and it’s getting more sophisticated with every day that passes. By incorporating an IP risk score into their fraud prevention strategies, companies can minimize the risk of threat actors entering their websites.

An IP risk scoring is a calculated number that evaluates various factors based on an Internet Protocol (IP) address to determine how likely the user is to engage in fraudulent behaviors. It takes into account the risk level of an IP, tagged geolocation (if available), proxy detection, address validation, email verification, community involvement, and more.

Assessing Digital Threats: An Introduction to IP Risk Scoring

When evaluating an IP risk score, businesses can identify the most dangerous addresses for their own unique needs and take appropriate action. This might include tagging an address as suspicious and putting it on a blacklist or simply blocking all transactions from that IP. The goal is to avoid preventing legitimate users from accessing the site, but also to ensure that they are not exposed to threats like credit card fraud or identity theft.

To get an accurate picture of an IP’s risk, businesses need to look at the overall history of that address. This includes past fraud or abuse reports and the behavior of other users from that IP. These factors help to create a more accurate and predictive Domain Risk Score that will inform a company on how risky it is to do business with an IP address. This score can be incorporated into the IPQS User & Transaction Scoring API alongside other features such as Phone Validation and Address Verification to improve detection for invalid user data and better prevent fraud.