ELECTRONIC COMMERCE SYSTEM AND METHOD FOR DETECTING FRAUD

• US 20070198361A1
• Filed: 10/12/2006
• Published: 08/23/2007
• Est. Priority Date: 12/04/1998
• Status: Active Grant

• Current Assignee: Digital River Incorporated (Danube Private Holdings II, LLC)
• Original Assignee: Digital River Incorporated (Danube Private Holdings II, LLC)
• Inventors: Wical, Kelly, Ronning, Joel
• Granted Patent: US 8,271,396 B2
• Time in Patent Office: Days
• US Class Current: 705/26.1
• CPC Class Codes: G06Q 20/10 specially adapted for electronic funds transfer [EFT] systems; specially adapted for home banking systems
• CPC Class Codes: G06Q 20/3674 involving authentication
• CPC Class Codes: G06Q 20/382 insuring higher security of transaction
• CPC Class Codes: G06Q 20/40 Authorisation, e.g. identification of payer or payee, verification of customer or shop credentials; Review and approval of payers, e.g. check credit lines or negative lists
• CPC Class Codes: G06Q 20/401 Transaction verification
• CPC Class Codes: G06Q 30/0185 Product, service or business identity fraud
• CPC Class Codes: G06Q 30/06 Buying, selling or leasing transactions
• CPC Class Codes: G06Q 30/0601 Electronic shopping [e-shopping]
• CPC Class Codes: G06Q 30/0609 Buyer or seller confidence or verification
• CPC Class Codes: G06Q 30/0633 Lists, e.g. purchase orders, compilation or processing
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: H04L 67/06 specially adapted for file transfer, e.g. file transfer protocol [FTP]
• CPC Class Codes: H04L 69/329 in the application layer [OSI layer 7]

Abstract

An electronic commerce system managing sale and distribution of products over the Internet or other type of network. In order to prevent attempts by users to fraudulently obtain the products, system analyzes the information submitted by the users in connection with stored and associated information in an order to determine that likelihood that the order is an attempt at fraud. Based upon the determination, system accepts or declines the order. The system also saves the user-entered information for use in determining whether to accept to decline future orders.

Claims

1. An electronic commerce system having a server and an end user machine interacting through a network during an electronic commerce transaction, the server comprising:

a software module configured to receive user-entered information via the network including an electronic purchase order for a product within the electronic commerce system; and

a fraud detection mechanism active during electronic commerce transactions configured to determine a fraud ranking that indicates a likelihood that the electronic purchase order is attempted fraud based upon a number of times that a charge back occurred on a credit card associated with the electronic purchase order.

2. The electronic commerce system of claim 1 wherein the number of times that a charge back occurred on the credit card associated with the electronic purchase order is a count of charge backs that occurred that day.

3. The electronic commerce system of claim 1 wherein the number of times that a charge back occurred on the credit associated with the electronic purchase order is a count of charge backs that occurred any time before this electronic purchase order.

4. The electronic commerce system of claim 1 wherein the fraud detection mechanism includes a software module configured to also determine the fraud ranking based upon a number of times user-entered information was included in an electronic purchase order that failed to obtain credit card authorization.

5. The electronic commerce system of claim 1 wherein the fraud detection mechanism includes a software module configured to also determine the fraud ranking based upon a user'"'"'s real-time interaction with the electronic commerce system during a transaction to process the electronic purchase order where an attempt is made to change information in the electronic purchase order that is detected by a comparison of a snapshot of information about the electronic purchase order taken after the purchase order has been submitted for processing by the system.

6. The electronic commerce system of claim 5 wherein the fraud detection mechanism includes a software module configured to (i) save snapshots of information in the electronic purchase order at first and second times after the electronic purchase order has been submitted and (ii) compare the snapshot of information in the electronic purchase order saved at the first time with the snapshot of information in the electronic purchase order saved at the second time.

7. The electronic commerce system of claim 1 wherein the fraud detection mechanism includes a software module configured to also determine the fraud ranking based upon a user'"'"'s real-time interaction with the electronic commerce system during a transaction to process the electronic purchase order where a user'"'"'s path of progression through web pages associated with submitting the electronic purchase order is analyzed.

8. The electronic commerce system of claim 1 wherein the fraud detection mechanism includes a software module configured to compare the fraud ranking against a particular fraud scale.

9. The electronic commerce system of claim 1 further comprising a fraud prevention mechanism that declines an electronic purchase order based on the fraud ranking determined by the fraud detection mechanism.

10. A method performed by an electronic commerce system having a server and an end user machine interacting through a network during an electronic commerce transaction, the method comprising steps of:

receiving user-entered information via the network including an electronic purchase order for a product within the electronic commerce system; and

determining a fraud ranking that indicates a likelihood that the electronic purchase order is attempted fraud based upon a number of times that a charge back occurred on a credit card associated with the electronic purchase order.

11. The method of claim 10 wherein the determining step comprises determining the fraud ranking based upon the number of times that a charge back occurred that day on the credit card associated with the electronic purchase.

12. The method of claim 10 wherein the determining step comprises determining the fraud ranking based upon the number of times that a charge back occurred any time before this electronic purchase order on the credit card associated with the electronic purchase.

13. The method of claim 10 wherein the determining step further comprises determining the fraud ranking based upon a number of times the user-entered information was included in an electronic purchase order that failed to obtain credit card authorization.

14. The method of claim 10 wherein the determining step further comprises determining the fraud ranking based upon a user'"'"'s real-time interaction with the electronic commerce system during a transaction to process the electronic purchase order where an attempt is made to change information in the electronic purchase order that is detected by a comparison of a snapshot of information about the electronic purchase order taken after the purchase order has been submitted for processing by the system.

15. The method of claim 14 further comprising steps of:

saving snapshots of information in the electronic purchase order at first and second times after the electronic purchase order has been submitted; and

comparing the snapshot of information in the electronic purchase order saved at the first time with the snapshot of information in the electronic purchase order saved at the second time.

16. The method of claim 10 wherein the determining step further comprises determining the fraud ranking based upon a user'"'"'s real-time interaction with the electronic commerce system during a transaction to process the electronic purchase order where a user'"'"'s path of progression through web pages associated with submitting the electronic purchase order is analyzed.

17. The method of claim 10 further comprising a step of comparing the fraud ranking against a particular fraud scale.

18. The method of claim 10 further comprising a step of preventing fraud by declining an electronic purchase order based on the fraud ranking determined by the determining step.

19. An article of manufacture including instructions stored on a medium for controlling an electronic commerce system having a server and an end user machine interacting through a network during an electronic commerce transaction, the medium comprising software modules configured to control the electronic commerce system to perform the steps of claim 10.

20. An article of manufacture including instructions stored on a medium for controlling an electronic commerce system having a server and an end user machine interacting through a network during an electronic commerce transaction, the medium comprising:

a software module configured to receive user-entered information via the network including an electronic purchase order for a product within the electronic commerce system; and

a fraud detection software module configured to be active during electronic commerce transactions and further configured to determine a fraud ranking that indicates a likelihood that the electronic purchase order is attempted fraud based upon a number of times that a charge back occurred on a credit card associated with the electronic purchase order.