Every device connected to the Internet, including your phone, tablet, watch or smart fridge, has a unique public IP address. These jumbles of letters and numbers are essential for automatic connection to the Internet and help you find websites, send or receive emails, chat with others online and more. But they’re also a valuable tool for fraudsters, who use them to commit a wide range of criminal activities.

That’s why many fraud detection tools include an IP fraud score, a numerical rating that indicates how likely a particular IP is to be used for fraudulent purposes. Fraud detection tools generate these scores by examining data points linked with transactions, such as the location and frequency of an IP’s activity. By analyzing data, businesses can identify fraud indicators and take action to minimize the risk of bad actors entering their sites.

Decoding IP Risk Scores: Understanding the Assessment of Online Threats

An IP fraud score is a vital part of any business’s fraud prevention strategy. But it’s important to note that IP fraud scores are not a foolproof method of detecting fraud and should be used alongside other fraud detection methods, such as device fingerprinting and geolocation.

An IP fraud score helps businesses detect potentially fraudulent behavior, such as multiple high-value purchases or a single payment from an unfamiliar account. These scores are based on data such as an IP’s geographic location, whether it’s associated with proxy or VPN services, its connection type and more. Businesses can use these scores along with transactional and behavioral data to help them make informed decisions about whether to process a purchase or not.