Processing payment card transaction records to determine insurance fraud risk

• US 10,210,576 B2
• Filed: 10/23/2015
• Issued: 02/19/2019
• Est. Priority Date: 10/23/2015
• Status: Active Grant

• Current Assignee: Mastercard International Incorporated (MasterCard Incorporated)
• Original Assignee: Mastercard International Incorporated (MasterCard Incorporated)
• Inventors: Howe, Justin X., Shuken, Randy
• Primary Examiner(s): Hamilton, Lalita M
• Application Number:
  US14/921,576
• Publication Number:
  US 20170116674A1
• Time in Patent Office: 1,215 Days
• Field of Search: 705 4, 705 38
• CPC Class Codes: G06Q 40/08 Insurance

Abstract

A risk determination computing device for determining a risk of insurance fraud is provided. Additionally, a method for determining a risk of insurance fraud is provided. Further, a computer-readable storage medium having computer-executable instructions embodied thereon for determining a risk of insurance fraud is provided.

Claims

1. A risk determination computing device for determining a risk of property insurance fraud by a merchant, said risk determination computing device in communication with a multi-party payment card processing network, said risk determination computing device comprising:

a memory for storing data; and

a processor in communication with the memory, the processor configured to;

receive at least one transaction record signal including records of a plurality of payment card transactions processed by the multi-party payment card processing network for a first merchant at a first geographic location, wherein each of the payment card transactions is associated with one of a plurality of payment cards issued by a respective one of a plurality of issuers, and wherein each of the records includes at least one transaction-type flag;

parse the records to quantify a number of the records for which the transaction-type flag corresponds to a collusive merchant chargeback initiated by the respective one of the plurality of issuers;

calculate an insurance risk score associated with a risk of insurance fraud relating to insured property at the first geographic location based at least in part on the quantified number of records; and

transmit an insurance risk signal including a representation of the insurance risk score to an insurer computing device.

2. The risk determination computing device of claim 1, wherein the processor is further configured to:

identify, from the at least one transaction record signal, a first price for a particular product sold by the merchant at a first time based on the at least one transaction record signal;

identify, from the at least one transaction record signal, a second price for the particular product sold by the merchant at a second time that is subsequent to the first time;

determine an amount of change between the first price and the second price; and

calculate the insurance risk score based at least in part on the amount of change.

3. The risk determination computing device of claim 1, wherein the processor is further configured to:

estimate, from the at least one transaction record signal, a first economic status of a first set of customers that purchased products from the first merchant during a first time period;

estimate, from the at least one transaction record signal, a second economic status of a second set of customers that purchased products from the first merchant during a second time period that is subsequent to the first time period;

determine an amount of change between the first economic status and the second economic status; and

calculate the insurance risk score based at least in part on the amount of change.

4. The risk determination computing device of claim 1, wherein the records are first records, and wherein the processor is further configured to:

receive a second transaction record signal including transactions processed by the multi-party payment card processing network for merchants at a plurality of different geographic locations within a predefined geographic area that includes the first geographic location;

determine a change in value of the predefined geographic area based at least in part on the second transaction record signal;

calculate the insurance risk score based at least in part on the change in value.

5. The risk determination computing device of claim 1, wherein the processor is further configured to:

determine a change in volume of payment card transactions processed for the first merchant from a first time period to a second time period, based at least in part on the transaction record signal; and

calculate the insurance risk score based at least in part on the change in volume.

6. The risk determination computing device of claim 1, wherein the processor is further configured to:

receive a risk request signal from an insurer computing device, the risk request signal including the first geographic location; and

transmit the insurance risk signal in response to the risk request signal.

7. The risk determination computing device of claim 1, wherein the processor is further configured to:

receive a risk request signal from an insurer computing device, the risk request signal including the first geographic location and a first insurance premium associated with the first geographic location;

calculate a second insurance premium for the first geographic location based on the insurance risk score; and

transmit the insurance risk signal to the insurer computing device including the second insurance premium.

8. The risk determination computing device of claim 1, wherein the processor is further configured to:

determine, from the at least one transaction record signal, a number of different payment card accounts associated with the payment card transactions processed by the multi-party payment card processing network during a predefined time period;

estimate a number of different customers that visited the first geographic location during a predefined time period, based at least in part on the number of different payment card accounts; and

determine a likelihood of premises liability insurance claim based on the number of different customers; and

calculate the insurance risk score based at least in part on the likelihood of premises liability.

9. The risk determination computing device of claim 1, wherein the processor is further configured to calculate the insurance risk score by determining a risk of fire insurance fraud or vehicle insurance fraud based on the at least one transaction record signal.

10. A method for determining a risk of property insurance fraud, the method is implemented by a risk determination computing device in communication with a multi-party payment card processing network, the risk determination computing device including one or more processors in communication with a memory, said method comprising:

receiving, by the risk determination computing device, at least one transaction record signal including records of a plurality of payment card transactions processed by the multi-party payment card processing network for a first merchant at a first geographic location, wherein each of the payment card transactions is associated with one of a plurality of payment cards issued by a respective one of a plurality of issuers, and wherein each of the records includes at least one transaction-type flag;

parsing, by the risk determination computing device, the records to quantify a number of the records for which the transaction-type flag corresponds to a collusive merchant chargeback initiated by the respective one of the plurality of issuers;

calculating, by the risk determination computing device, an insurance risk score associated with a risk of insurance fraud relating to insured property at the first geographic location based at least in part on the quantified number of records; and

transmitting, by the risk determination computing device, an insurance risk signal including a representation of the insurance risk score to an insurer computing device.

11. The method of claim 10, further comprising:

identifying, by the risk determination computing device and from the at least one transaction record signal, a first price for a particular product sold by the merchant at a first time based on the at least one transaction record signal;

identifying, by the risk determination computing device and from the at least one transaction record signal, a second price for the particular product sold by the merchant at a second time that is subsequent to the first time;

determining, by the risk determination computing device, an amount of change between the first price and the second price; and

calculating, by the risk determination computing device, the insurance risk score based at least in part on the amount of change.

12. The method of claim 10, further comprising:

estimating, by the risk determination computing device and from the at least one transaction record signal, a first economic status of a first set of customers that purchased products from the first merchant during a first time period;

estimating, by the risk determination computing device and from the at least one transaction record signal, a second economic status of a second set of customers that purchased products from the first merchant during a second time period that is subsequent to the first time period;

determining, by the risk determination computing device, an amount of change between the first economic status and the second economic status; and

calculating, by the risk determination computing device, the insurance risk score based at least in part on the amount of change.

13. The method of claim 10, wherein the records are first records, the method further comprising:

receiving, by the risk determination computing device, a second transaction record signal including transactions processed by the multi-party payment card processing network for merchants at a plurality of different geographic locations within a predefined geographic area that includes the first geographic location;

determining, by the risk determination computing device, a change in value of the predefined geographic area based at least in part on the second transaction record signal;

calculating, by the risk determination computing device, the insurance risk score based at least in part on the change in value.

14. The method of claim 10, further comprising:

determining, by the risk determination computing device, a change in volume of payment card transactions processed for the first merchant from a first time period to a second time period, based at least in part on the transaction record signal; and

calculating, by the risk determination computing device, the insurance risk score based at least in part on the change in volume.

15. The method of claim 10, further comprising:

receiving, by the risk determination computing device, a risk request signal from an insurer computing device, the risk request signal including the first geographic location; and

transmitting, by the risk determination computing device, the insurance risk signal in response to the risk request signal.

16. A non-transitory computer-readable storage medium having computer-executable instructions embodied thereon, wherein when executed by a risk determination computing device coupled to a multi-party payment card processing network and having at least one processor coupled to a memory, the computer-executable instructions cause the at least one processor to:

receive at least one transaction record signal including records of a plurality of payment card transactions processed by the multi-party payment card processing network for a first merchant at a first geographic location, wherein each of the payment card transactions is associated with one of a plurality of payment cards issued by a respective one of a plurality of issuers, and wherein each of the records includes at least one transaction-type flag;

parse the records to quantify a number of the records for which the transaction-type flag corresponds to a collusive merchant chargeback initiated by the respective one of the plurality of issuers;

calculate an insurance risk score associated with a risk of insurance fraud relating to insured property at the first geographic location based at least in part on the quantified number of records; and

transmit an insurance risk signal including a representation of the insurance risk score to an insurer computing device.