Apparatus and method for adaptive fraud screening for electronic commerce transactions

• US 7,058,597 B1
• Filed: 08/11/1999
• Issued: 06/06/2006
• Est. Priority Date: 12/04/1998
• Status: Expired due to Term

• Current Assignee: Digital River Incorporated (Danube Private Holdings II, LLC)
• Original Assignee: Digital River Incorporated (Danube Private Holdings II, LLC)
• Inventors: Ronning, Joel A., Wical, Kelly J.
• Primary Examiner(s): NGUYEN, CUONG H
• Application Number:
  US09/372,253
• Time in Patent Office: 2,491 Days
• Field of Search: 705 26- 27
• US Class Current: 705/26.35
• 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 apparatus configured to detect and to prevent attempted fraud during electronic commerce transactions, comprising:

a software-based module within the computerized system configured to provide electronic purchase of products via a network;

a software-based module within the computerized system configured to receive an order, from a user, for one of the products via the network; and

a software-based module within the computerized system configured to generate a cumulative fraud ranking providing an indication of a likelihood that the order involves attempted fraud, the cumulative fraud ranking being generated based upon historical information with respect to transactions with the system before submission of the order, the user'"'"'s activity with respect to the order during an on-line session to receive the order, and the user'"'"'s activity with respect to the order after submission of the order for processing.

2. The apparatus of claim 1 wherein the generate module includes a module configured to compare the user'"'"'s progression of pages associated with submitting the order and particular profiles of progression of pages.

3. The apparatus of claim 1 wherein the generate module includes a module configured to determine a number of orders requested within a particular time frame and associated with the user and for comparing the number of orders against particular criteria.

4. The apparatus of claim 3 wherein the generate module includes a module configured to determine an amount of each of the number of orders and for comparing the amount against particular criteria.

5. The apparatus of claim 1 wherein the generate module includes a module configured to compare the fraud ranking against a particular fraud scale.

6. The apparatus of claim 1, further including a module for determining within the computerized system whether to accept the order based upon the cumulative fraud ranking.

7. A method performed by a computerized system for use in detecting and preventing attempted fraud during electronic commerce transactions, comprising:

providing within the computerized system electronic purchase of products via a network;

receiving within the computerized system an order, from a user, for one of the products via the network; and

generating within the computerized system, a cumulative fraud ranking providing an indication of a likelihood that the order involves attempted fraud, the cumulative fraud ranking being generated based upon historical information with respect to transactions with the system before submission of the order, the user'"'"'s activity with respect to the order during an on-line session to receive the order, and the user'"'"'s activity with respect to the order after submission of the order for processing.

8. The method of claim 7 wherein the generating step includes comparing the user'"'"'s progression of pages associated with submitting the order and particular profiles of progression of pages.

9. The method of claim 7 wherein the generating step includes:

determining a number of orders requested within a particular time frame and associated with the user; and

comparing the number of orders against particular criteria.

10. The method of claim 9 wherein the generating step includes:

determining an amount of each of the number of orders; and

comparing the amount against particular criteria.

11. The method of claim 7 wherein the generating step includes

comparing the fraud ranking against a particular fraud scale.

12. The method of claim 7 wherein the generating step includes comparing the fraud ranking against a particular fraud scale.

13. The method of claim 7, further including determining within the computerized system whether to accept the order based upon the cumulative fraud ranking.

14. A method performed by a computerized system for use in detecting and preventing attempted fraud during electronic commerce transactions, comprising:

providing within the computerized system electronic purchase of products via a network;

receiving within the computerized system an order, from a user, for one of the products via the-network, the order including several pieces of information related to the order;

generating within the computerized system a cumulative fraud ranking based upon information associated with each of the pieces of information and based upon historical information with respect to transactions with the system before submission of the order, the user'"'"'s activity with respect to the order during an on-line session to receive the order, and the user'"'"'s activity with respect to the order after submission of the order for processing; and

determining within the computerized system whether to accept the order based upon the cumulative fraud ranking.

15. The method of claim 14 wherein the generating step includes comparing the user'"'"'s progression of pages associated with submitting the order and particular profiles of progression of pages.

16. The method of claim 14 wherein the generating step includes:

determining a number of orders requested within a particular time frame and associated with the user; and

comparing the number of orders against particular criteria.

17. The method of claim 16 wherein the generating step includes:

determining an amount of each of the number of orders; and

comparing the amount against particular criteria.