Fraud risk factor is a number from 1 to 10 estimating the riskiness of accepting a credit card for a certain order (the higher the number the higher the risk). The calculation is performed in two steps:

I. At this step, AntiFraud server processes the following parameters:

  • country_doesnot_match (binary value, 1 or 0)

  • city_doesnot_match (binary value, 1 or 0)

  • is_free_email (binary value, 1 or 0)

  • is_anonymous_proxy (binary value, 1 or 0)

  • fraudulent_ip (binary value, 1 or 0)

  • proxy_score (decimal value, from 0 to 10)

  • spam_score (decimal value, from 0 to 10)

  • CHECK_IP_DISTANCE (integer value, distance in km)

The algorithm used is as follows:

  • Initially, fraud risk factor is assigned the value "0" (zero).

  • If any of the binary parameters takes the value of "1" (true), the fraud risk factor is increased by a certain (“know how”) value.

  • If ‘proxy_score’ or ‘spam_score’ exceeds 4, the fraud risk factor is increased by a certain (“know how”) value.

  • If ‘CHECK_IP_DISTANCE’ exceeds the AntiFraud safe distance value, the fraud risk factor is increased by a certain (“know how”) value.

  • Finally, if the result of fraud risk factor calculation exceeds 10, it is set to 10.

II. Once the first step is completed, the calculated value is passed on to X-Cart to be adjusted according to all of the following rules:

  • If the order total is greater than the Order total threshold value - ‘order_limit_excess’ becomes "1" (true), and the fraud risk factor is multiplied by 2;

  • If the customer has had processed orders in the past, ‘completed orders’ takes the value of "1" (true), and the fraud risk factor is divided by 2;

  • If the customer has had canceled orders in the past, ‘declined_orders’ takes the value of "1" (true), and the fraud risk factor is multiplied by 1,5;

  • If the IP address being checked has been already used to place orders under a different user account, ‘foreign_ip_address’ takes the value of "1" (true), and the fraud risk factor is multiplied by 2;

  • If the customer’s billing address is considered to be a high-risk country, ‘is_high_risk_country’ takes the value of "1" (true), and the fraud risk factor is incremented by 7.

  • Finally, if the fraud risk factor value is above 10, it is set to 10.

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