Posted on Category:Tech

How to Use IP Addresses to Prevent Fraud

One of the easiest ways to prevent fraud is to understand how IP addresses are being used. When used in combination with other data, it can reveal where nefarious users are located. A comprehensive monitoring and testing program can help to link users to known IP address activity.

It is also important to consider that a single IP address may be used by multiple ISPs over time. This means that a company’s ability to identify high risk IPs and block an attacker is dependent on confidence in the security measures of its ISP.

However, a number of other factors play into the assessment of the quality of a particular IP address. For example, proxies complicate the scoring process. While a proxy does serve a useful purpose, it can also be a target for abuse.

In the context of fraud identification, a reputable system can perform complex authentication methods to verify that a user has the right level of access to a given network or website. The use of a high risk IP is one way to determine whether an account is safe to accept.

Of course, this is not to say that the best method to determine the identity of an anonymous user is to simply block the IP. Some users opt for more sophisticated methods, such as automating the risk management process when a malicious IP is detected.

One of the best uses of an IP address is to score the various transaction information associated with a given transaction. This can include the source of the transaction, the type of transaction, and the associated risk.