What is an IP Risk Score?

How IP Risk Scoring Works

IP risk scoring combines multiple fraud signals into a single actionable risk level. Each signal provides evidence about the IP address—whether it's a proxy, its geographic location, associated threats, historical behavior. By combining signals intelligently, scoring systems achieve higher accuracy than any single signal alone.

Fraudlogix IP Risk Score processes each transaction in under 100 milliseconds, analyzing the source IP against our comprehensive threat database. The API returns a risk level (Low, Medium, High, or Extreme) plus detailed signal data—proxy detection results, geographic information, threat indicators—enabling both automated decisions and manual review.

Risk levels provide clear decision guidance. Low risk indicates residential IPs with clean histories—approve seamlessly. Medium risk suggests some suspicious signals—consider additional verification. High risk shows multiple fraud indicators—require strong authentication. Extreme risk indicates the highest fraud likelihood based on multiple severe indicators—typically warrants blocking. Organizations set policies based on their risk tolerance for each level.

Signals Analyzed

Fraudlogix evaluates multiple independent signals to calculate comprehensive risk scores. Proxy and VPN detection identifies anonymization services used to hide true locations. Data center detection flags hosting infrastructure where legitimate users don't operate. Geographic analysis spots impossible travel patterns and mismatches between claimed and actual location. Device farm detection identifies concentrations of activity indicating organized fraud operations. Threat intelligence incorporates global observations of malicious activity associated with IPs.

IP Risk Score Use Cases

E-commerce Fraud Prevention

Online retailers score every transaction's source IP during checkout. High-risk scores trigger card testing prevention, identity verification, or order review. Moderate scores might flag orders for manual review. Low scores process seamlessly. This protects against e-commerce fraud while minimizing friction for legitimate customers.

Account Security

Login attempts from high-risk IPs warrant additional verification—MFA challenges, email confirmation, security questions. This prevents account takeover attacks and credential stuffing campaigns while avoiding unnecessary friction for users logging in from trusted locations.

Mobile App Install Validation

Mobile attribution platforms score install source IPs to detect install fraud. High scores indicate device farms, emulators, or click fraud operations. This prevents wasting CPI budgets on fake installs while accepting legitimate mobile users.

Payment Processing

Payment gateways and processors score transaction IPs to prevent credit card fraud. High-risk scores decline transactions or require 3D Secure verification. This reduces chargebacks while maintaining payment approval rates for legitimate customers.

API Protection

APIs rate-limit or block requests based on IP risk scores. High-risk IPs indicate scraping bots, credential testing, or abuse. Scoring enables nuanced protection—aggressive rate limiting for high-risk IPs, normal limits for legitimate traffic.

Advertising & Programmatic

Ad platforms and publishers score impression and click source IPs to prevent ad fraud. Extreme risk IPs from data centers or bot networks get blocked pre-bid. High risk IPs might trigger additional verification or post-bid review. This protects advertiser budgets from click fraud and impression fraud while maintaining clean inventory for legitimate campaigns.

Affiliate Marketing

Affiliate networks and tracking platforms score traffic source IPs to detect affiliate fraud. Extreme risk indicates click farms or bot traffic generating fake conversions. High risk suggests suspicious patterns worthy of investigation. Low risk confirms legitimate referral traffic. IP risk scoring protects affiliate programs from paying commissions on fraudulent conversions.

Fintech Applications

Financial technology platforms score user IPs during onboarding, transactions, and account access. Extreme risk IPs attempting account access warrant immediate blocking. High risk during money movement triggers enhanced verification. Medium risk during signup might require additional identity verification. IP scoring protects fintech from fraud while enabling smooth experiences for legitimate users.

Banking & Financial Services

Banks score login attempt IPs to prevent unauthorized access and account takeover. Extreme risk IPs trigger immediate blocks. High risk requires multi-factor authentication. Medium risk might prompt out-of-band verification. Transaction IPs also get scored—Extreme risk declines payments, High risk requires additional verification, Low risk processes seamlessly.

Benefits of IP Risk Scoring

Real-Time Fraud Detection

IP Risk Score API returns results in milliseconds, fast enough for real-time decisions during checkout, login, or API requests. Instant fraud assessment prevents fraudulent transactions without degrading user experience or slowing application performance. Test it yourself with our bot checker, VPN checker, or proxy checker tools.

Graduated Risk Response

Categorical risk levels enable nuanced responses beyond binary blocking. Organizations create multi-tier risk strategies—automatic approval for Low risk, additional verification for Medium/High risk, blocking for Extreme risk. This balances security with user experience better than blocklist-only approaches.

Comprehensive Signal Analysis

Fraudlogix combines 15+ independent fraud signals into unified scores. Multiple signal analysis achieves higher accuracy and lower false positive rates than relying on individual detection methods. Comprehensive scoring catches sophisticated fraud that evades single-signal detection.

Easy Integration

REST API integration requires minimal development effort. Send IP addresses, receive risk scores and detailed data. No complex SDK integration, no ongoing maintenance. Simple API calls enable fraud protection in hours rather than weeks.

Actionable Intelligence

Beyond risk levels, Fraudlogix API returns detailed signal data—proxy type detected, geographic information, threat indicators, risk factors. This contextual data supports manual review, investigation, and understanding of fraud patterns.

Implementing IP Risk Scoring

Define Risk Policies

Define responses for each risk level based on your risk tolerance. Conservative policies might block Extreme and High risk while requiring verification for Medium. Balanced policies might block only Extreme while requiring verification for High and approving Medium/Low. Aggressive fraud prevention might block Extreme/High and require verification for Medium. Test and adjust policies based on observed fraud rates and user experience impact.

Define Action Tiers

Create graduated responses for each risk level. Extreme risk actions include blocking transactions, declining payments, requiring phone verification, or manual review. High risk actions include email verification, CAPTCHA challenges, transaction limits, or delayed processing. Medium risk might trigger additional authentication or monitoring. Low risk allows seamless processing with minimal friction.

Monitor and Adjust

Track metrics for each risk level—fraud rates, false positive rates, conversion impact, customer complaints. Adjust policies based on performance. Tighten policies (block High instead of just Extreme) if fraud penetrates, loosen them (approve Medium without verification) if false positives hurt legitimate users. Continuous optimization balances security and user experience.

Combine with Other Signals

IP risk scores work best as one fraud signal among many. Combine with device fingerprinting, behavioral analysis, order value limits, velocity checks, and user history. Layered defenses catch more fraud with fewer false positives than relying on IP analysis alone.

Handle Edge Cases

Define policies for ambiguous situations. Users on corporate VPNs, travelers using hotel WiFi, or customers in high-risk countries might receive Medium or High risk levels despite being legitimate. Provide support channels for users incorrectly flagged, whitelist known corporate networks, and allow verification processes for borderline cases.

Frequently Asked Questions