System and method for detecting fraudulent transactions

• US 6,714,918 B2
• Filed: 11/18/2002
• Issued: 03/30/2004
• Est. Priority Date: 03/24/2000
• Status: Expired due to Term

• Current Assignee: Access Business Group International LLC (Alticor Incorporated)
• Original Assignee: Access Business Group International LLC (Alticor Incorporated)
• Inventors: Jones, Richard A., Hillmer, James M., Johnston, Connie S., Deshpande, Sanjay H., Lewis, Kelly R. Jr., Gessner, Colleen M.
• Primary Examiner(s): Fischetti, Joseph A.
• Application Number:
  US10/298,625
• Publication Number:
  US 20030069820A1
• Time in Patent Office: 498 Days
• Field of Search: 705/18, 705/44, 713/182
• US Class Current: 705/18
• CPC Class Codes: G06Q 20/24 Credit schemes, i.e. "pay after"
• 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 20/4016 involving fraud or risk level assessment in transaction processing
• CPC Class Codes: G06Q 20/4037 Remote solvency checks
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof
• CPC Class Codes: G07F 7/08 by coded identity card or credit card or other personal identification means without personal verification means G07F7/02

Abstract

A system for detecting fraudulent transactions is disclosed. The system breaks the transaction down into its component parameters. A first score is computed depending on the propensity of the transacted commodity to be involved in fraud. A second score is computed as a function of the authentication of the remaining parameters of the transaction. A total fraud score is computed from the first score and the second score and compared against a fraud threshold to determine the likelihood of the transaction being fraudulent.

Claims

1. A computer implemented system for detecting fraudulent transactions between a customer and a vendor, said computer comprising a memory and a processor coupled with said memory, said system comprising:

a positive database comprising data representing a plurality of past non-fraudulent transactions known to said vendor;

a negative database comprising data representing a plurality of past known fraudulent transactions;

one or more transaction databases comprising consumer and geographic transaction information;

a commodity database comprising data representing valuation and propensity to incite fraudulent activity for a plurality of commodities;

transaction logic resident in said memory and operative to be executed by said processor to receive a transaction of a commodity from a vendor and decompose said transaction into a plurality of transaction parameters, said plurality of transaction parameters being characterized by an authenticity;

result logic resident in said memory and operative to be executed by said processor to send an indication to said vendor whether said transaction is one of fraudulent and non-fraudulent;

valuation logic resident in said memory and coupled with said transaction logic, said result logic and said commodity database and operative to be executed by said processor to compute the total value of said transaction and cause said result logic to indicate that said transaction is non-fraudulent if said total value is less than a first pre-determined threshold;

comparison logic resident in said memory and coupled with said transaction logic, said result logic and said positive database and operative to be executed by said processor to compare said transaction with said positive database and cause said result logic to indicate that said transaction is non-fraudulent if said transaction matches at least one of said plurality of past non-fraudulent transactions in said positive database; and

fraud logic resident in said memory and coupled with said transaction logic, said result logic and said negative database, said one or more transaction databases and said commodity database and operative to be executed by said processor to compute a first score as a function of said past fraudulent transactions and said propensity to incite fraudulent activity of said commodity, a second score as a function of said authenticity of said plurality of transaction parameters and a fraud score as a function of said first and second scores, said fraud logic being further operative to cause said result logic to indicate that said transaction is fraudulent if said fraud score exceeds a second pre-determined threshold.

2. The system of claim 1, wherein one or more of said positive database, said negative database, said one or more transaction databases, said commodity database, said transaction logic, said result logic, said valuation logic, said comparison logic and said fraud logic operates on a computer system internal to said vendor and the remaining of said one or more of said positive database, said negative database, said one or more transaction databases, said commodity database, said transaction logic, said result logic, said valuation logic, said comparison logic and said fraud logic operates on a computer system external to said vendor, said internal and external computer systems in communication with each other.

3. The system of claim 1, wherein said fraud logic is further coupled with said valuation logic and further wherein said second score is dynamically adjusted as a function of said total value.

4. The system of claim 1, wherein said fraud logic is further coupled with said valuation logic and further wherein said second pre-determined threshold is dynamically adjusted as a function of said total value.

5. The system of claim 1, wherein said system is operative to process said transaction in real time.

6. The system of claim 1, wherein said system is operative to receive two or more of said transactions and process said two or more of said transactions in batch.