An IP risk score helps reduce the likelihood of bad actors accessing your site by assigning points based on various risk factors. Check out this IP fraud risk assessment
IP Fraud Scores – What Is It?
For example, using a VPN adds +1 points, while an emulator adds +2 points. After tallying these points, you get an overall IP fraud score.
IP reputation also affects the overall score: IP addresses previously linked to bots or fraudsters will have a higher risk score or might be automatically blacklisted by your provider.
Organizations typically use this scoring method during registration, login, or purchase stages to prevent potential malicious activities, such as account takeovers.
Although an IP fraud score is a type of fraud score, it specifically pertains to internet protocols, unlike a general fraud score, which assesses a user’s overall fraud risk based on their transactions and purchasing behavior.
How do IP Fraud Scores Work?
IP fraud scores are determined by analyzing data related to a user’s IP address through risk rules. Each rule adds or subtracts points from the fraud score. Once all points are tallied, an automated system evaluates whether the score indicates risk.
For instance:
- An IP address from Russia adds +2 points.
- An ISP linked to a residential address subtracts -1 point.
- An open port scan revealing a suspicious SSH connection adds +5 points.
The total IP fraud score in this example is 6 (2-1+5=6). Your anti-fraud system then classifies the user as high, medium, or low risk based on your thresholds. The objective is to gather extensive data to enhance the accuracy of the risk prediction.
What IP information is crucial for determining an IP fraud score?
To effectively score IP fraud, your system must identify various IP parameters. Here are key types of IPs to recognize:
Public vs. Private IP Addresses Think of an IP address as a mailbox. A public IP is like a central sorting office, while private IPs are the local addresses. Note that “private” does not mean hidden; it simply links to a local network and is discoverable.
IP Data from Different Devices Public IP addresses, assigned by ISPs to any internet-connected device, are necessary for accessing wide area networks like the Internet. Devices on a local network (LAN) use private addresses to communicate, typically within the same building.
IP Addresses and Geolocation IP addresses can reveal geolocation information, influencing targeted ads and blocking content based on location. Accuracy varies with the database used, such as P2Country (95% accuracy) and IP2Region (50-75% accuracy for city and area code granularity).
Public IP Address Features Public IP addresses are automatically generated by ISPs and must be unique. Devices need IP addresses to connect to the Internet, including phones, tablets, PCs, laptops, and IoT devices like smart fridges. Residential IP addresses are particularly valuable to fraudsters and can be traded in specific markets.
