Velocity-based rules have long been used by merchants to help identify potentially fraudulent online behavior. Typically, velocity-based rules function by looking at commonalities in personal information, across accounts and transactions. For example, a warning may be set off if multiple accounts, or multiple orders, all have different names but the same shipping address. Another example might be if multiple accounts were all set up using the same password.

Unfortunately, these kinds of velocity checks are of limited value against more sophisticated fraudsters who have the information, the technology, and the general savvy to set up multiple accounts that all, on paper, look completely different—different names, different credit card numbers, different shipping addresses, different IP addresses.

This is why including the device associated with an account or transaction can be an extremely valuable component of velocity-based rules. Even if all the elements of personal data look different among a set of accounts or transactions, if they all have the same device in common, it’s a good indication that something is wrong. With velocity-based rules focused on the device, you can monitor the number of accounts created, or the number orders placed, from one single computer.

In a world where hackers are making it more difficult for online businesses to verify the real identities of the people they’re doing business with, device fingerprinting combined with velocity-based rules provides a powerful one-two punch for identifying suspicious activities and stopping fraud that operates under the radar of many fraud detection systems. For many of our customers, having visibility into this activity is one of the biggest advantages they gain from including device fingerprinting as part of their fraud prevention process.

Tags: device fingerprint, device ID, device identification, Online Fraud, velocity checks, velocity-based rules

This entry was posted on Monday, January 11th, 2010 at 9:38 am and is filed under Financial Services, Online Communities, Online Gambling, Online Gaming, Online Retail. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.