The IP fraud test is a tool used to check the legitimacy of an IP address and detect potential fraud activities. It combines multiple methods and techniques such as honeypots and traps, forensic analysis, range scanning, machine learning and a system of reporting from the users themselves. Some services also relay contextual information about the IP such as whether it is shared or not, its geographical location (which helps identify potential scammer proxies), and its internet service provider.

Running an IP Fraud Test: Essential Steps for Online Security

This information can be very valuable for ecommerce businesses, especially those with high transaction volumes, and financial institutions, which are common targets for scammers and fraudsters. It can help to reduce fraudulent activity and avert losses from fraudsters, and can be a key element of risk scoring algorithms for B2B and B2C transactions.

However, a caution should be heeded as some of this information may be misleading or inaccurate if used in isolation. For example, if an IP is identified as coming from a datacenter, it does not necessarily mean that the user is a fraudster, and it could be due to legitimate reasons such as having to work remotely or use a VPN for security purposes.

There are many different services that offer IP fraud scores, with some free or low-cost options for businesses looking to run basic checks. Paid services provide more comprehensive and detailed data, and can be worth the investment for those needing accurate results. Each of these services will have their own set of criteria that they looks at to calculate the fraud score, and it is important for any business using this type of service to be aware of what the criteria are before making any conclusions about an IP’s status.