Electronic commerce system and method for detecting fraud

• US 8,271,396 B2
• Filed: 10/12/2006
• Issued: 09/18/2012
• 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 Alan, Wical, Kelly J.
• Primary Examiner(s): Nigh, James D
• Application Number:
  US11/549,036
• Publication Number:
  US 20070198361A1
• Time in Patent Office: 2,168 Days
• Field of Search: 705/1, 705/64, 705/26.8, 705/26.81, 705/26.82, 705/75
• US Class Current: 705/75
• 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 processor;

a memory, comprising processor executable instructions which when executed by the server processor causes the server processor to perform the operations of;

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

saving a first snapshot of the electronic purchase order along with a timestamp;

determining a fraud ranking that the electronic purchase order is attempted fraud based upon information associated with the electronic purchase order;

saving a second snapshot of the electronic purchase order along with a second timestamp;

receiving a bank authorization of the electronic purchase order;

saving a third snapshot of the electronic purchase order along with a third timestamp;

determining, using the timestamps, a rate at which information is changing in the electronic purchase order between the first, second and third snapshots;

detecting if fraud is taking place for the electronic purchase order based on the determined rate at which information is changing in the electronic purchase order; and

accepting the electronic purchase order after detecting that no fraud is taking place for the electronic purchase order.

2. The electronic commerce system of claim 1 wherein the memory further comprises processor executable instructions which when executed by the server processor causes the server processor to perform the operations of declining the electronic purchase order after detecting that fraud is taking place for the electronic purchase order based on the determined rate at which information is changing in the electronic purchase order.

3. The electronic commerce system of claim 1 wherein the operation of detecting if fraud is taking place further comprises determining that a charge back request occurred on the credit card number associated with the electronic purchase order.

4. The electronic commerce system of claim 1 wherein the memory further comprises processor executable instructions which when executed by the server processor causes the server processor to perform the operations of also determining the fraud ranking based upon a number of times user-entered information was included in any electronic purchase order that failed to obtain credit card number authorization.

5. The electronic commerce system of claim 1 wherein the memory further comprises processor executable instructions which when executed by the server processor causes the server processor to perform the operations of also 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.

6. The electronic commerce system of claim 5 wherein the memory further comprises processor executable instructions which when executed by the server processor causes the server processor to perform the operations of (i) comparing the first, second, and third snapshots of information in the electronic purchase order to determine whether the snapshots match;

and (ii) declining the electronic purchase order when the snapshots do not match.

7. The electronic commerce system of claim 1 wherein the memory further comprises processor executable instructions which when executed by the server processor causes the server processor to perform the operations of also 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.

8. The electronic commerce system of claim 1 wherein the memory further comprises processor executable instructions which when executed by the server processor causes the server processor to perform the operations of comparing the fraud ranking against a particular fraud scale.

9. The electronic commerce system of claim 1 wherein the memory further comprises processor executable instructions which when executed by the server processor causes the server processor to perform the operations of declining an electronic purchase order based on the fraud ranking.

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

receiving user-entered information, at the server device, for an electronic purchase order for a product that was entered by a user into the end user machine;

saving, by the server device, a first snapshot of the electronic purchase order along with a timestamp;

determining, by the server device, a fraud ranking that the electronic purchase order is attempted fraud based upon information associated with the electronic purchase order;

saving, by the server device, a second snapshot of the electronic purchase order along with a second timestamp;

receiving, by the server device, a bank authorization of the electronic purchase order;

saving, by the server device, a third snapshot of the electronic purchase order along with a third timestamp;

determining, by the server device, using the timestamps, a rate at which information is changing in the electronic purchase order between the first, second and third snapshots;

detecting, by the server device, if fraud is taking place for the electronic purchase order based on the determined rate at which information is changing in the electronic purchase order; and

accepting, by the server device, the electronic purchase order after detecting that no fraud is taking place for the electronic purchase order.

11. The method of claim 10 further comprising a step of declining the electronic purchase order after detecting that fraud is taking place for the electronic purchase order based on the determined rate at which information is changing in the electronic purchase order.

12. The method of claim 10 wherein the detecting step further comprises determining that a charge back request occurred on the credit card number associated with the electronic purchase order.

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

14. The method of claim 10 wherein the determining a fraud ranking 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:

comparing the first, second, and third snapshots of information in the electronic purchase order to determine whether the snapshots match; and

declining the electronic purchase order when the snapshots do not match.

16. The method of claim 10 wherein the determining a fraud ranking 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 a fraud ranking step.

19. An article of manufacture comprising a non-transitory medium, storing executable instructions which when executed by a server processor causes the server processor to perform the operations of:

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

saving a first snapshot of the electronic purchase order along with a timestamp;

determining a fraud ranking that the electronic purchase order is attempted fraud based upon information associated with the electronic purchase order;

saving a second snapshot of the electronic purchase order along with a second timestamp;

receiving a bank authorization of the electronic purchase order;

saving a third snapshot of the electronic purchase order along with a third timestamp;

determining, using the timestamps, a rate at which information is changing in the electronic purchase order between the first, second and third snapshots;

detecting if fraud is taking place for the electronic purchase order based on the determined rate at which information is changing in the electronic purchase order; and

accepting the electronic purchase order after detecting that no fraud is taking place for the electronic purchase order.