Scoring methodology for purchasing card fraud detection

Details Scoring methodology for purchasing card fraud detection Scoring methodology for purchasing card fraud detection

1999-12-20

2002-07-09

Popovici, Dov (Department: 2175)

Data processing: database and file management or data structures

Database design

Data structure types

C707S793000

Reexamination Certificate

active

06418436

ABSTRACT:

TECHNICAL FIELD
The present invention relates to systems and methods for detecting and preventing purchasing card fraud.
BACKGROUND ART
Roughly half a billion transactions with significant, but preventable, fraud potential occur in the United States each year. Purchasing card contact events that can lead to fraudulent occurrences include application processing, card activation, usage, such as mail and phone ordering, convenience events, such as address or other information changes. It is estimated that the total cost of fraud is $1.3 million for every one million gross active accounts, or 1.34 in fraud loss per gross active account (sources: Visa/MasterCard, Credit Card Prevention Source Book).
A large portion of this fraud could effectively be addressed through improved identification of known fraudulent names, fraudulent addresses, fraudulent phone numbers, fraudulent social security numbers, and other fraudulent personal information. In fact, a large number of fraud cases are typically perpetrated by repeat offenders or organized rings who use the same fraudulent personal information.
The current tools to combat repeat and organized fraud are still under development. However, one tool soon to be implemented pools personal data known to be fraudulent in a central database. A merchant application is sent to the fraud database for inspection. The applicant information is compared with known fraudulent information stored within the database. If a match occurs an alert is sent to the merchant alerting the merchant that a fraud is potentially being perpetrated.
Although the prior art system described above works for its intended purpose one problem not addressed by the prior art system is the high potential for sending a false positive match warning to the merchant. For example, portions of a merchant application when compared against the known fraudulent information may match while other portions may not match the known fraudulent information and thus cause an alert to be sent to the merchant applicant without an indication of the overall reliability of the match. Without an indication of how reliable the match is there is a significant probability that a false positive match will be sent to the client.
Therefore, a need exists for a new and improved system and method for determining whether a fraud match has occurred as well as providing an indication of the reliability of the fraud match.
DISCLOSURE OF INVENTION
Therefore, it is object of the present invention to provide a system and method for scoring a fraud match to indicate the reliability of the fraud match.
In accordance with this and other objects, the present invention provides a method for scoring a match between applicant data provided by a client and data stored in a fraud database. The method includes determining whether an applicant data portion matches a fraud data portion in the fraud database, ascertaining whether the applicant data portion which matches the fraud data portion occurs in a unique identifier portion of the applicant data, establishing whether the matched applicant data occurs in an applicant field which is a non-unique identifier field, discerning whether the matched applicant data occurs in an applicant field which is a reference field, calculating a first match value based on whether the match occurs in the non-unique identifier field, a second match value based on whether the match occurs in the unique identifier field, and a third match values to arrive at a total match value based on the field the match occurs in, and concluding that a match has occurred if the total match value exceeds a predefined value.
In accordance with another aspect of the present invention a system is provided for scoring a match between applicant data provided by a client and data stored in a fraud database. The system includes a merchant application having a unique identifier portion, a non-unique identifier portion, and a reference portion, a processor having access to the merchant information for calculating a first match score based on a match occurring in the non-unique identifier portion, a second match score based on a match occurring in the unique identifier portion, and a third match score based on a match occurring in the reference portion, and wherein the processor sums the first, second, and third match scores to arrive at a total match score to determine whether the total match score has exceeded a predefined match score.
The above object and other objects, features, and advantages of the present invention are readily apparent from the following detailed description of the best mode for carrying out the invention when taken in connection with the accompanying drawings.


REFERENCES:
patent: 5062074 (1991-10-01), Kleinberger
patent: 6134340 (2000-10-01), Hsu et al.
patent: 6289111 (2001-09-01), Takhar

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