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Using Neustar GeoPoint for Online Fraud Prevention


Online fraud continues to bedevil companies whose revenue depends on reliable web transactions: financial institutions, health care organizations, retailers, gaming companies and many, many more. In 2011, estimated losses totaled $3.4B in the U.S. alone, according to the CyberSource 2012 Online Fraud Report. Efforts to combat online fraud attempt to balance fraud risk, fraud loss mitigation and fraud opportunity costs.

IP geolocation data has an important role to play in detecting fraud and protecting against it. And Neustar GeoPoint offers unique advantages.

In assessing fraud, it helps to understand geographical and network information related to the user’s IP address. The veil of anonymity over the Internet’s architecture is an advantage for the bad guys, so scrutinizing transaction IP addresses should be standard due diligence. With Neustar GeoPoint® geolocation data, business rules become more granular and accurate, which in turn enable you to:

  • Prevent online fraud
  • Mitigate risk
  • Reduce legitimate false positive transactions
  • Enhance internal access management information
  • Support fraud chargeback and claim management

Detect Credit Card Fraud

For card not present (CNP) online transactions, geolocation data helps identify anomalies related to an IP address: the known credit card billing address, known shipping address, and billing phone number(s), all tied to the zip code and area code associated with a transaction. If anomalies exist, the transaction can be flagged for additional scrutiny or be rejected and later manually reviewed. To assist fraud analysts, GeoPoint offers wide zip code dispersion along with higher resolution.

Enhance Authentication Security

To enhance authentication security and adaptive risk management, GeoPoint utilizes known device and location attributes, which helps zero in on high-risk login attempts. Each transaction attempted per session may be further scored for risk, increasing the confidence level and minimizing phishing and fraud risk. GeoPoint data includes Anonymizer and Proxy fields to lower the risk of approving malicious transactions and rejecting legitimate ones. GeoPoint provides anonymizer status, the date when anonymizing proxies were last detected, proxy types (HTTP, Tor, SOCKS, et al) and proxy levels of obfuscation (transparent, anonymous, distorting and elite).

Additional Fraud Protection with Scoring, Analysis, Reporting

To determine broad scoring, statistical analysis, and reporting, GeoPoint data can be used to build internal-lookup customer account data, based on subscribed-to GeoPoint data fields (Bronze, Silver, Gold data editions). For example, based on the transaction IP, the GeoPoint data fields would be related to derivative regional, state, city and sub-city attributes, including confidence factor designators. Data from associated fields would then be integrated with internal customer account data to protect online transactions and support ongoing efforts to prevent fraud.

Identify Online Gaming Fraud

Online gaming developers can integrate GeoPoint with gaming analytics to identify gamers and their behaviors, averages, and thresholds. This information also helps to separate real gamers from cheaters, deactivate fake accounts, compare usage to the possibility of stolen credit card fraud, and close security holes.

In addition to basic GeoPoint data fields, as well as Anonymizer and Proxy, the User Type field shows whether a gamer is at home or a business facility. This allows fraud analysts to make inferences about the internet connection, intent, and interests of the gamer, which not only lowers fraud but ensures regulatory compliance.

In Summary

Neustar GeoPoint enables businesses to apply the right business rules to detect, analyze and prevent online fraud. GeoPoint addresses the need to monitor transactions, prevent phishing, detect anomalies in online user behaviors, and determine anomalies in the relationship of known user locations and IP connections. The latter utilizes IP Intelligence to see what potential fraudsters might be trying to conceal. GeoPoint further enables fraud shops to modify their fraud scoring and associated business rules. It reduces manual reviews on rejected online orders, plus helps:

  • Lower chargeback and operating losses
  • Enrich the customer experience
  • Protect the bottom line
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