Method and apparatus for evaluating fraud risk in an electronic commerce transaction

US7970701B2 · kind B2 · utility

Assignee

• CyberSource Corporation · US

Inventors

• Michael Lewis · Nashville, US
• Frank King · Saratoga, US
• Thomas Arnold · Saratoga, US
• William Wright · Bedford, US
• John Pettit · Sausalito, US

Key dates

• Filing date: Feb 20, 2008
• Grant date: Jun 28, 2011
• Expiry date: Mar 31, 2029

Classification

• Technology area (CPC G): Physics
• CPC primary: G06Q40/03
• WIPO field: IT methods for management
• WIPO sector: Electrical engineering

Abstract

A technique for evaluating fraud risk in e-commerce transactions between consumer and a merchant is disclosed. The merchant requests service from the system using a secure, open messaging protocol. An e-commerce transaction or electronic purchase order is received from the merchant, the level of risk associated with each order is measured, and a risk score is returned. In one embodiment, data validation, highly predictive artificial intelligence pattern matching, network data aggregation and negative file checks are used. The system performs analysis including data integrity checks and correlation analyses based on characteristics of the transaction. Other analysis includes comparison of the current transaction against known fraudulent transactions, and a search of a transaction history database to identify abnormal patterns, name and address changes, and defrauders. In one alternative, scoring algorithms are refined through use of a closed-loop risk modeling process enabling the service to adapt to new or changing fraud patterns.