PayPal Fraud Management Filters - 2009 User Guide
Contents
1. Fraud Management Filters Overview PayPal provides many Fraud Management Filters which make it easier for you to detect and respond to fraudulent transactions You must configure the filters before they take effect Fraud management filters FMF provide you with tools called filters that can identify potentially fraudulent transactions The kinds of filters can be divided into the following categories e Basic filters include filters that screen against the country of origin the value of transactions and such PayPal provides basic filters for business accounts and Website Payments Pro accounts e Advanced filters include filters that screen credit card and addresses information filters that screen against lists of high risk indicators and filters that screen additional transaction characteristics Website Payments Pro merchants can upgrade to use advanced filters NOTE Using advanced filters may incur additional charges Fraud Management Filters checks for payment characteristics that may indicate fraudulent activity You set up Fraud Management Filters to provide the tightest control possible over payments so that you can deny payments that are likely to result in fraudulent transactions and accept payments that are not typically a problem Payments that may reguire further investigation or intervention such as comparing prior orders or contacting the customer for more information can be flagged or put on hold or pended for revie2. Intended Audience Revision Histoly 4 24 su Be das eee LA YF EA GEG Rhee ah REG y PRA eS Chapter 1 Introducing Fraud Management Filters Fraud Management Filters Overview Fraud Management Filters Examples Reviewing High Value Transactions I Denying Transactions From High Risk Countries 10 Flagging Transactions With Invalid Card Security Codes 11 Accepting Transactions Using the Total Price Minimum Filter 11 Using Multiple Filters FFF EFE ug 12 Modifying the ExamplestoMeetYourNeeds I 14 Merchants With Third Party Shopping Carts 14 Chapter 2 Setting Up Fraud Management Filters 15 Chapter Chapter Fraud Management Filters June 23 2009 Configuring Your Fraud Management Filters FF y 15 Fraud Management Filter Settings 17 Fraud Management Filters Setup Strategy ug 17 3 Using Fraud Management Filters 19 Accepting and Denying Payments 19 Monitoring Fraud Management Filters Performance 21 Using Fraud Management Filters with Virtual Terminal 22 Using Payment Fraud Search 27 4 Customizing Websites to use
3. Download My History i Show Fraud Activity vi Reports Status All v Business Overview Triggered By Any View reports on sales disputes and other ithin Any financial activity O Within The Pal AVS No Match y AVS Partial Match From 11 AVS Unavailable Unsupported Month Card Security Code CSC Mismatch Maximum Transaction Amount To 2 Unconfirmed Address L Country Monitor Month Large Order Number Billing Shipping Address Mismatch Risky ZIP Code Suspected Freight Forwarder Check Total Purchase Price Minimum IP Address Velocity Risky Email Address Domain Check Risky Bank Identification Number BIN Check Risky IP Address Range Paypal Fraud Model The following search presents the results of a search for potentially fraudulent payments detected by the Maximum Transaction Amount filter including both those that have been denied or pended for your review Recent Activity Last up Fraud Activity from D Done 28 June 23 2009 Fraud Management Filters Using Fraud Management Filters Using Payment Fraud Search History History Bars Search MU View up to three morths of View adranied Search monthly account statements Mew Search for Fitered Trensactions Search Show Fraud Actwty s Reports Status Al a ani adn y n Triggered Byi Marinem Transaction Amount 4 disputes and other fynaneal activity within The Past Day M frm Ki hs or Maeth Dar
4. IP address range filter 45 IP address velocity filter 45 June 23 2009 51 52 IPN messages for FMF 31 K kinds of filters 41 L large order number filter 45 maximum transaction amount filter 41 maximum trasaction amount filter 9 migration from Risk Controls 40 multiple filters 12 P Payment Receiving Preferences 49 PayPal fraud model filter 46 pending state 48 and capture 49 Payment Receiving Preferences 49 supported flows 49 performance monitoring 21 prereguisites for using API 34 programming 31 detecting pending transactions 36 37 handling errors 37 R review setting for filter 9 17 Risk Controls migration to FMF 40 S set up stratety 17 setting up filters 15 suspected freight forwarder filter 44 T total price minimum filter 11 total purchase price minimum filter 45 transaction details reviewing 19 transaction flows 49 U unconfirmed address filter 42 V Virtual Terminal processing 22 47 W Website Payments Pro 42 websites customizing 31 Z zip code filter 44 June 23 2009 Fraud Management Filters
5. more severe actions PayPal also provides you with feedback on the operation of each filter 18 June 23 2009 Fraud Management Filters Using Fraud Management Filters You can use PayPal to monitor transactions for fraud and determine the effectiveness of your Fraud Management Filters e Accepting and Denying Payments e Monitoring Fraud Management Filters Performance e Using Fraud Management Filters with Virtual Terminal e Using Payment Fraud Search Accepting and Denying Payments You can use the Fraud Management Filters related features from the Transaction History page You can accept or deny a pending payment from the Transaction History page Date Tye ToFtom MameEmail Status Details Action Gross Fee Met Amount Sep 23 2008 Payment From Pending Details Accept Deny 81300USD 000USO 1300USD You can also view the transaction details to help you make a decision about whether to accept or deny a payment as shown below The reason that the transaction is pending waiting for your review is explained at the bottom of this page Fraud Management Filters June 23 2009 si Using Fraud Management Filters Accepting and Denying Payments Transaction Details Yirlual Terminal Transauliurs IIC 2220C1541M7105Z14Pi Name _ iTre sender of this pa men is Unregistered Email No emai address included Payment Sent to 20071209 1702161C6 1 seller ipaypal com Total Amount 51 3 USD Estimated Fee 0 73 USO Net
6. Address Mismatch Select Action Advanced Filters High Risk Lists O Risky 21P Code Select Action Suspected Freight Forwarder F D Check E Select Action M D Risky Emoil Address Domain Select Action O Risky Bank Identification Number Select Action v BIN Check D Risky 1P Address Range Select Action M Advanced Filters Transaction Data O Laras Order Number Select Action v 0 USD O Total Purchase Price Minimum Select Action W o Y D IP Address Velocity Select Action M Edit O Paypal Fraud Model Select Action Y NOTE The available filters are determined by agreement between the merchant and PayPal You may not be granted access to all filters 16 June 23 2009 Fraud Management Filters Setting Up Fraud Management Filters Ell Fraud Management Filter Settings Fraud Management Filter Settings You can configure Fraud Management Filters to accept or deny a payment and to review or flag a transaction Setting Description Accept Accept the payment This setting is only used by the Total Price Minimun filter which causes PayPal to accept transactions that fall below a minimum transaction amount regardless of the setting of any other filter Deny Deny the payment You should only use this setting if you are certain you want the filter to disgualify the payment For example you might deny payments from countries for which it is too difficult to co
7. Fraud Management Filters For example if the payment occurs as part of an authorization or order you must accept the payment before it can be captured Interaction with Payment Receiving Preferences Fraud Management Filters operates on a payment as soon as the transaction occurs Other PayPal fraud protection services may not pend a payment until later in the process A transaction could be pended for your review by Fraud Management Filters and then be pended for your review by another PayPal fraud protection service You can use Payment Receiving Preferences with Fraud Management Filters however you need to be aware that Fraud Management Filters pends a payment as the first step in processing a transaction while Payment Receiving Preferences may pend a payment during capture Both Payment Receiving Preferences and Fraud Management Filters can pend a payment during a sale For authorizations and orders however Fraud Management Filters can pend a payment and you can accept it just to have Payment Receiving Preferences pend the payment again during capture In these cases you must accept the payment twice Fraud Management Filters June 23 2009 49 Fr Fraud Management Filters Operating Principles Fraud Management Filters Pending State Operation 50 June 23 2009 Fraud Management Filters Fraud Management Filters Index A accept setting for filter 11 17 address verification service no match filter 42 address verification servic
8. Fraud Management Filters 31 Using Fraud Management Filters With IPN 31 Fraud Management Filters API Prerequisites 34 NVP Example a 44 404 da du a de drag Ra here mie ah 35 SOAP Example 36 Eg Contents Detecting Pending Transactions Using the PayPalAPI 36 Handling FMF Errors in Payment API Operations o 37 Migration From Risk Controls 40 Chapter 5 Fraud Management Filters Summary 41 Kinds of Fraud Management Filters 41 Basic Fraud Management Filters 41 Maximum Transaction Amount Filter 41 Unconfirmed Address Filter 42 Country Monitor Filter 42 Advanced Fraud Management Filters 42 Card and Address Validation Filters FF a 42 High Risk Lists Filters 44 Transaction Data Filters 45 Chapter 6 Fraud Management Filters Operating Principles 47 Fraud Management Filters Operation With Direct Credit Card and Virtual Terminal Payments 47 Fraud Management Filters Operation With Other Payment Transactions 48 Fraud Management Filters Pending State
9. Management Filters June 23 2009 41 42 Fraud Management Filters Summary Advanced Fraud Management Filters maximum amount trigger this filter An unusually high total amount can indicate potential fraudulent activity because fraudsters generally aren t price sensitive as they aren t paying with their own money The Maximum Transaction Amount filter applies to all payments Unconfirmed Address Filter This filter screens for payments above the specified amount when the shipping address entered by your customer has not yet been confirmed by PayPal as belonging to the PayPal account holder A confirmed address is less likely to be used for fraudulent activity however there are many valid reasons why a customer s legitimate address may not be confirmed For example the customer may have recently moved or may live in a country where address confirmation is not available Currently only addresses in Canada the United Kingdom and the United States can be confirmed You can also specify a maximum amount for the payment in which amounts lower than the specified amount are not checked The Unconfirmed Address filter applies to all payments NOTE Allpayments made using debit cards credit cards and Virtual Terminal are considered to be from unconfirmed addresses Country Monitor Filter This filter screens for payments from countries that you believe to pose an increased risk of fraud by screening a customer s IP address billing address and
10. Operation 48 Supported Transaction Flows for Review Action 49 Capturing Pending Payments 49 Interaction with Payment Receiving Preferences 49 Index a as HAS ED a ie a ev oe 91 4 June 23 2009 Fraud Management Filters Preface This document describes Fraud Management Filters Intended Audience This document is intended for merchants implementing the PayPal Fraud Management Filters Revision History Revision history for Fraud Management Filters TABLE P 1 Revision History Date Description 06 23 09 Updated to note that configuration of Fraud Management Filters is reguired before they take effect 01 31 09 Updated to show correct filters and include IPN and API programming examples This manual 1s for Canada UK and US 09 30 08 Updated to show new free filters 04 18 08 Second draft 12 20 07 First draft Fraud Management Filters June 23 2009 Na Revision History 6 June 23 2009 Fraud Management Filters Introducing Fraud Management Filters PayPal Fraud Management Filters enable you to identify potentially fraudulent transactions You must configure Fraud Management Filters to meet your needs they are not active until you configure them e Fraud Management Filters Overview e Fraud Management Filters Examples e Merchants With Third Party Shopping Carts
11. Print this Page Start a New Transaction For more information you can review the transaction details 24 June 23 2009 Fraud Management Filters Item Amount 20 00 USD Shipping 0 00 USD Handling 0 00 USD Ouantity 1 Date Dec 19 2007 Time 13 25 51 PST Status Denied Using Fraud Management Filters Using Fraud Management Filters with Virtual Terminal Reason This payment was denied by the recipient Joe s Generic Business on Dec 19 2007 Seller Protection Ineligible EJ Policy Shipping Address No Address Provided Payment Type Virtual Terminal Transaction Card Type Visa Address Verification x Service AYS Card Security Code M CSC Risk Filters Triggered Unconfirmed Address Review Edit your Payment Type Virtual Terminal Transaction Consider another Virtual Terminal transaction this one in which the total payment amount is 110 Fraud Management Filters June 23 2009 25 KOGE Using Fraud Management Filters Using Fraud Management Filters with Virtual Terminal Virtual Terminal Review Transaction Secure Transaction f Please review the transaction details Click Process Transaction to submit or Edit to make changes Details Transaction Type Sale Net Order Amount 100 00 USD Shipping 10 00 USD Tax Amount 0 00 USD Total 110 00 USD Credit Card Information Card Type Visa Credit Card Number XXXX XXXX XXXX 6052 Shipping Information No shipping informatio
12. Year eye 9 Sen Month Day Year Recent Activity Last updated 12 19 2007 13 33 PST Fraud Activity from Nov 19 2007 to Dec 19 2007 Date Type To From Name Email Status Details i Action Gross Fee Net Amownt Dec 19 2007 Payment From Denied Retais 110 00 USD 0 00USD 110 00 USO Dec 19 2007 Payment From Densed Patais 110 00 USD 40 00 USD 110 00 USO Dec 19 2007 Paymeet From Denied Datais 30 09 USD 0 00U5D 30 00 USD Dee 11 2007 Payment From Pendng Data s Accept Dew 14 00USD 40 00 USD 14 00 USD Dec 11 2007 Payment From Densed Cetais 13 00 050 0 00USD 13 00 USD You can examine the transaction details of these payments in the same way as any other transaction You can also accept or deny pended payments listed in the history Fraud Management Filters June 23 2009 29 Ea Using Fraud Management Filters Using Payment Fraud Search 30 June 23 2009 Fraud Management Filters Customizing Websites to use Fraud Management Filters You can detect and manage Fraud Management Filter results using IPN and the PayPal API All merchants using IPN or the PayPal API must ensure that their systems can handle transactions pended by Fraud Management Filters e Using Fraud Management Filters With IPN e Fraud Management Filters API Prereguisites e_ Detecting Pending Transactions Using the PayPal API e Handling FMF Errors in Payment API Operations e Migration From Risk Controls Using Fraud Management Fi
13. for the time period that you specify e the monetary volume and percentage of payments accepted after Fraud Management Filters have been applied e the monetary volume and percentage of payments that are pending review e the monetary volume and percentage of payments denied after Fraud Management Filters have been applied The Performance Monitor also shows the number and total monetary effect of the filters that have been triggered during the specified time period Fraud Management Filters June 23 2009 21 22 Using Fraud Management Filters Using Fraud Management Filters with Virtual Terminal Monitor Filter Performance Edit Your Filter Settings Search Transactions Resources Monitor Fraud Management Filter Performance By monitoring how your Fraud Management Filters are performing you can adjust your settings to match your business goals and personal risk tolerance Transactions Filtered Within Last 1 day s Y STATUS TRANSACTIONS AMOUNT Accepted 2 21 00 uso WW 20 Review Pending 0 0 00 USD 0 Denied 8 111 00 uso DES 80 Total 10 Flagged o 40 00 USD 0 Transactions Denied Filter Triggered Transactions Affected Amount AVS No Match 1 10 00 USD Maximum Transaction Amount 2 46 00 USD Unconfirmed Address 1 10 00 USD Lares Order Number 1 10 00 USD IP Address Velocity 1 5 00 USD Risky Bank Identification Number BIN Check 2 40 00 USD Using Fraud Management Filters with Virtual Terminal You can use Fra
14. log onto PayPal to review and accept or deny payments or provide your own solution using the PayPal API to develop a custom application June 23 2009 Fraud Management Filters Setting Up Fraud Management Filters You must set up Fraud Management Filters after you sign up for them e Configuring Your Fraud Management Filters e Fraud Management Filter Settings e Fraud Management Filters Setup Strategy Configuring Your Fraud Management Filters Configuring Fraud Management Filters to enable filters that are predictive of fraud reguires both experimentation and iteration By default Fraud Management filters are not configured to identify potentially fraudulent transactions IMPORTANT By default Fraud Management Filters are not configured You must configure your filters before they take effect You configure PayPal Fraud Management Filters to accept as many payments as possible automatically deny payments that are clearly associated with fraud and review the payments that are outside your normal experience but may or may not indicate an attempt to defraud When you first start you should consider using filters only to flag payments in which case the payment is accepted but you can easily locate and view the payment later If you notice that a filter configuration is predictive of fraud you can either change the filter configuration to review the payment or to deny the payment If you choose to review the payment you may want
15. payment status Denied shipping 0 00 mc gross 2 11 custom charset windows 1252 notify version 2 4 Fraud Management Filters API Prereguisites If your website uses PayPal APIs and you want to use FMF you must detect transactions that have been pended by Fraud Management Filters IMPORTANT To use Fraud Management Filters with the PayPal API you must use version 52 0 or higher of the PayPal API To detect transactions that have been pended by Fraud Management Filters you must ensure that your website meets the following criteria e You must handle Pending in the pending status of a response as representing a successful payment e You must handle the SuccessWithWarning acknowledgement status in the response to any of the following API operations that you use Bi11User DoDirectPayment DoExpressCheckoutPayment DoReferenceTransaction 34 June 23 2009 Fraud Management Filters Customizing Websites to use Fraud Management Filters ll Fraud Management Filters API Prereguisites Any of these APIs could return a SuccessWithWarning status indicating that the transaction was pended IMPORTANT You may lose payment transactions if you do not handle SuccessWithWarning acknowledgements e You must capture and evaluate the return code associated with a SuccessWithWarning acknowledgement e If you process authorizations or orders you must be able to analyze the short message associated with a capture fa
16. to incorporate the review into your normal workflow If a filter is not predictive of fraud you can deselect the filter To configure Fraud Management Filters select Fraud Management Filters from your Profile Then enable the filters you want to use from the Edit My Filter Settings page Fraud Management Filters June 23 2009 15 Es Setting Up Fraud Management Filters Configuring Your Fraud Management Filters Monitor Filter Edit My Filter Settings Performance Edit Your Filter Fraud Management Filters flag potentially fraudulent transactions Settings Search T You can indicate whether you would like to Review Deny or Flag transactions To restore PayPal s default settings click Restore Defaults below Resources 1 Select your Fraud Management Filters Secyrity Center 2 Choose how to handle filtered transactions and set values if necessary About Fraud 3 Click Save to activate filters Management Filters Fraud Management Activate Filter Name Filter Action Value Filters Documentation pdf Basic Fraud Management Filters w USD O Maximum Transaction Amount Select Action M 0 USD O Unconfirmed Address Select Action M pb Country Monitor Select Action M Edit Advanced Filters Card amp Address Validation O AVS No Match Select Action M O AWS Partial Match Select Action M AVS Unavailable Unsunported Select Action M o Bete E Select Action v Re o Billing Shipping
17. to match may indicate that the address provided by the customer is fraudulent however no match may simply be the result of a typographical error The Address Verification Service no match filter applies to Direct Credit Card and Virtual Terminal payments Not all merchants are eligible for this filter contact PayPal for more information if you want to use this filter Address Verification Service Partial Match Filter This filter screens for payments for which the billing address entered by your customer doesn t completely match the information maintained by the card issuer as determined by the Address Verification Service AVS This filter corresponds to AVS response codes A B P W and Z AVS compares the street number and zip code entered by the customer with information maintained by the card issuer A complete match helps verify that the customer using the credit card is the owner of the card Failure to match may indicate that the address provided by the customer is fraudulent however a partial match may simply be the result of a typographical error The Address Verification Service partial match filter applies to Direct Credit Card and Virtual Terminal payments Not all merchants are eligible for this filter contact PayPal for more information if you want to use this filter Address Verification Service Unavailable or Not Supported Filter This filter screens for payments for which the Address Verification Service AVS is unable to v
18. typical error handling for Fraud Management Filters 38 June 23 2009 Fraud Management Filters Customizing Websites to use Fraud Management Filters Handling FMF Errors in Payment API Operations if DPRes Ack AckCodeType Success No error Run success code Let buyer know mark the order as complete in database etc else if DPRes Ack AckCodeType SuccessWithWarning May be pended Test for pended transaction bool isFMFPended false for int z 0 z lt DPRes Errors Length zt if DPRes Errors z ErrorCode 11610 isFMFPended true Transaction was pended if isFMFPended true Keep information about filters causing transaction to be pended if DPRes FMFDetails PendingFilters null for int x 0 x lt DPRes FMFDetails PendingFilters Length x Useful information to be kept DPRes FMFDetails PendingFilters x Description DPRes FMFDetails PendingFilters x Id DPRes FMFDetails PendingFilters x Name else if DPRes Ack AckCodeType Failure DPRes Ack AckCodeType FailureWithWarning Definite failure Test for denied transaction bool isFMFDenied false for int z 0 z lt DPRes Errors Length 2z if DPRes Errors z ErrorCode 11611 isFMFDenied true Denied by FMF if isFMFDenied true Keep information about filters causing transactio
19. yYTxBKkr payer status unverified test ipn 1 fraud management pending filters 1 Maximum Transaction Amount tax 0 00 txn id 5XN64179EB804362B fraud management pending filters 2 Unconfirmed Address guantity 1 receiver email acgrte 1215804264 biz gmail com first name payer id PUWAJRBB8NM74 receiver id 2RXLTRMGT3M2G item number payment status Completed payment fee 0 45 mc fee 0 45 shipping 0 00 mc gross 3 33 custom charset windows 1252 notify version 2 4 The following example shows an IPN message indicating that a pended transaction has been denied Fraud Management Filters June 23 2009 33 GT Customizing Websites to use Fraud Management Filters Fraud Management Filters API Prereguisites txn type virtual terminal payment date 17 09 40 Jul 15 2008 PDT last name receipt id 0739 3836 3393 2098 residence country US item name payment gross 2 11 mc currency USD business acgrte 1215804264 bizGgmail com payment type instant verify sign AFCWxV21C7fd0v3bYYYRCpSSRI31ASrKFBPwac7a0m47p8CMLrdParSt payer status unverified test ipn 1 fraud management pending filters 1 Maximum Transaction Amount tax 0 00 txn id 53R82724RM1848354 fraud management pending filters 2 Unconfirmed Address guantity 1 first name receiver email acgrte 1215804264 biz gmail com payer id PUWAJRBB8NM74 receiver id 2RXLTRMGT3M2G item number
20. Amount 514 77 IND Mule This is Wie esti sled fee fur Lis transaction Ibis celculaled baser au puur aucuuil slalus al lle time ou cecived the payrrent Hem Amount 512 1 111351 Shipping 50 03 USD Handling 50 03 USD Quantity Date Dec 1 2007 Time 20 21 07 PST Status Penring Seller Protection nelivillc El Policy Shipping Address No Address rovided 20 June 23 2009 Fraud Management Filters Using Fraud Management Filters Kerli Monitoring Fraud Management Filters Performance Payment Type Virtual Terminal Transaction Surcharges Not Applicable Card Type Visa Address Verification x Service AVS Card Security Code M CSC Risk Filters Triggered Maximum Transaction Amount Review Edit your Fraud Management Filters Payment Type Virtual Terminal Transaction Refund Information This payment needs to be accepted or denied If you accept this payment and need to refund it later the Refund Payment link will be available by clicking Details in your transaction history for 60 Monitoring Fraud Management Filters Performance You can monitor the effect of choosing various Fraud Management Filters The Fraud Management Filters Performance Monitor enables you to graphically view the monetary effect of your filter settings You can use the monitor to quickly review the effect of your filter settings and make decisions to balance risk and convenience The monitor presents three bars that shows activity
21. PayPal Fraud Management Filters For Professional Use Only Currently only available in English A usage Professional Uniguement Disponible en Anglais uniquement pour l instant Last updated June 23 2009 Fraud Management Filters Document Number 10060 en US 200906 2009 PayPal Inc All rights reserved PayPal is a registered trademark of PayPal Inc The PayPal logo is a trademark of PayPal Inc Other trademarks and brands are the property of their respective owners The information in this document belongs to PayPal Inc It may not be used reproduced or disclosed without the written approval of PayPal Inc PayPal Europe Ltd is authorised and regulated by the Financial Services Authority in the United Kingdom as an electronic money institution PayPal FSA Register Number 226056 Notice of non liability PayPal Inc is providing the information in this document to you AS IS with all faults PayPal Inc makes no warranties of any kind whether express implied or statutory with respect to the information contained herein PayPal Inc assumes no liability for damages whether direct or indirect caused by errors or omissions or resulting from the use of this document or the information contained in this document or resulting from the application or use of the product or service described herein PayPal Inc reserves the right to make changes to any information herein without further notice Contents Preface
22. PayPal for more information if you want to use this filter Billing Shipping Address Mismatch Filter This filter screens for payments based on differences between the customer s billing and shipping addresses street state zip code and country The filter checks relationships among the street address city state and postal code and determines if a minor change is needed before filtering the transaction Fraud Management Filters June 23 2009 43 44 Fraud Management Filters Summary Advanced Fraud Management Filters A billing shipping address mismatch may indicate that the customer is shipping to an address different from the one the bill is sent to A mismatch could be due to a fraudster using a stolen identity to complete a purchase however there are also legitimate reasons why a customer s shipping and billing address might not match For example your customer might be buying a gift for someone who lives at a different address or they might want to have a purchase delivered to their workplace The billing shipping address mismatch filter applies to Direct Credit Card and Virtual Terminal payments High Risk Lists Filters You can filter transactions based on lists of risk criteria Zip Code Filter This filter screens for payments with billing addresses that include a zip code with historically high rates of fraud Zip codes are checked against a Risk List maintained by PayPal for US addresses High risk zip codes are
23. cation Number Filter This filter screens for payments from credit cards with Bank Identification Numbers BIN that have historically been associated with a relatively higher rate of fraudulent transactions BINs which identify the bank that issues the card are checked against a Risk List maintained by PayPal Some BINs carry a higher risk of fraud because the card issuer uses less stringent authentication policies before issuing cards Cards from issuers with a large number of cards in circulation may also represent higher risk because more cards are available to fall into the hands of fraudsters The bank identification number filter applies to Direct Credit Card and Virtual Terminal payments June 23 2009 Fraud Management Filters Fraud Management Filters Summary Ell Advanced Fraud Management Filters IP Address Range Filter This filter screens for payments from IP addresses with historically high instances of fraud IPs are checked against a Risk List maintained by PayPal Historically fraud is more likely to originate from compromised networks because fraudsters launch attacks from compromised computers or networks To use this filter you must send the customer s IP address along with the rest of the transaction information The IP address range filter applies to Direct Credit Card and Virtual Terminal payments Transaction Data Filters You can filter transactions based on transaction data Large Order Number Filter Th
24. ch case the transaction is marked as pending You explicitly accept or deny the payment before deciding whether to ship the reguested merchandise Specifying a review is similar to flagging the payment except that you must make an explicit decision whether to accept or deny the payment it is not automatically accepted Fraud Management Filters June 23 2009 17 Eg Setting Up Fraud Management Filters Fraud Management Filters Setup Strategy e Deny the payment This operation is automatic however because the action results in the loss of revenue if the payment is actually legitimate you should choose this action only after careful consideration In the case of the size of the transaction and with many other filters can choose a threshold for which the specified action applies for example you can flag review or deny transactions over a specified amount You should set up your Fraud Management Filters so that most transactions pass through your filters and payments are accepted automatically Your goal is to minimize the risk of a fraudulent transaction against the cost of denying a legitimate payment and to minimize the time reguired to review transactions To meet this goal you typically experiment with the filters available to you and the actions to take Before you set up a filter to deny payments or pend transactions for review you can set the filter to flag the transaction which allows you to identify the transactions before taking
25. determined through careful analysis of millions of e commerce transactions Because fraud tends to happen more often in densely populated areas like major cities zip codes on the risk list are often for major cities A matching zip code does not necessarily indicate a fraudulent purchase however it may indicate that you should pay special attention to the transaction This filter applies to Direct Credit Card and Virtual Terminal payments Suspected Freight Forwarder Filter This filter screens for payments whose shipping address is a known freight forwarder Addresses are checked against a Risk List maintained by PayPal which only applies to US shipping addresses Freight forwarding services receive packages on behalf of a customer and forward them to another destination There are legitimate uses for freight forwarding services however fraudsters can use a freight forwarder to mask their true locations This filter applies to Direct Credit Card and Virtual Terminal payments Email Address Domain Filter This filter screens for payments from email addresses with historically high instances of fraud Email domains are checked against a Risk List maintained by PayPal Fraudsters often use specific free email services because they don t reguire traceable billing information however free email services are also popular among legitimate customers This filter applies to Direct Credit Card and Virtual Terminal payments Bank Identifi
26. e Mismatch filter NOTE For Canadian merchants the Zip Code and Suspected Freight Forwarder filters only operate on US addresses These filters are not available to UK merchants Fraud Management Filters Operation With Other Payment Transactions For non Direct Credit Card and non Virtual Terminal transactions only basic Fraud Management Filters are applied For other payment transactions such as Express Checkout PayPal applies the basic filters you enable in the following order 1 Maximum Transaction Amount filter 2 Unconfirmed Address filter 3 Country Monitor filter Fraud Management Filters Pending State Operation Transactions that are set aside for review enter the pending state You can enable a filter by setting it to Accept to Deny Review or to Flag Payments awaiting review by you are marked by PayPal as pending More than one filter can cause a payment to be pended awaiting your review however as soon as a filter causes a payment to be accepted or denied all filtering stops The filter actions to accept deny or pend a payment for review are mutually exclusive PayPal can take only one of these actions for each transaction as it is processed by a filter NOTE The Review setting for a filter enables payments to be set aside for your review It is not the same as additional review actions that PayPal may take on your behalf to reduce fraud If you specify that a filter should flag a payment the PayPal u
27. e partial match filter 43 address verification service unavailable or not supported filter 43 advanced fraud management filters 42 API prereguisites 34 B bank identification number filter 44 billing shipping address mismatch filter 43 C capturing pendend payments 49 card security code mismatch filter 11 43 country monitor filter 10 42 credit card processing 47 customizing websites 31 D deny setting for filter 10 17 description of 7 E email address domain filter 44 error handling 37 examples using filters 8 Express Checkout processing 48 F filter operation 8 47 48 filters 7 address verification service no match 42 address verification service partial match 43 address verification service unavailable or not supported 43 bank identification number 44 billing shipping address mismatch 43 card security code mismatch 11 card security code mismatch filter 43 country monitor 10 42 email address domain 44 examples of 8 introduction to 7 IP address range 45 IP address velocity 45 kinds of 41 large order number 45 maximum transaction amount 9 41 multiple 12 operation of 8 47 48 PayPal fraud model 46 setup 17 setting up 15 settings for 17 suspected freight forwarder 44 total price minimum 11 total purchase price 45 unconfirmed address 42 zip code 44 flag setting for filter 11 17 flows supported by pending state 49 fraud search 27 H history fraud search 27 introduction to filters 7
28. eement between you and PayPal PayPal provides basic and advanced filters e Basic filters are automatically available to any PayPal business account holder using Website Payments Standard Website Payments Pro Express Checkout Virtual Terminal or Email Payments For more information about basic filters see Basic Fraud Management Filters e Advanced filters are available to Website Payments Pro merchants as an inclusive upgrade from the basic filters using them may incur additional charges Advanced filters are ideal for merchants with a medium to high volume of transactions You can use them to automate existing manual review processes They are specifically developed to combat credit card fraud by detecting fraudulent patterns in credit card payments For more information about advanced filters see Advanced Fraud Management Filters IMPORTANT You must have a business account to use Fraud Management Filters Not all filters are available in each country or to each merchant You can see your options by logging into PayPal and selecting Fraud Management Filters in the Profile Basic Fraud Management Filters Basic Fraud Management Filters are filters that are available to all PayPal business account holders Maximum Transaction Amount Filter This filter screens for payments above the specified amount by screening the total amount of the transaction including tax shipping and handling fees Transactions that exceed this Fraud
29. enabled reporting of FMF details in the reguest to these API operations the response identifies the filters that caused a transaction to be pended or denied when these actions occur To enable reporting of FMF filter information set the ReturnFMFDetails flag to 1 true in your reguest to DoDirectPayment DoExpressCheckoutPayment DoReferenceTransaction and BillUser You must explicitly request FMF detail information or the response will not contain it NOTE Fraud Management Filters operate whether or not you reguest FMF detail information Regardless of whether you return FMF detail information you must check for errors Specifically you must check for acknowledgements of Success and SuccessWithWarning in the response however PayPal recommends that you check for all possible acknowledgement status values You must check for errors codes 11610 and 11611 depending on the acknowledgement status e Ifthe acknowledgement status is SuccessWithWarning check for error code 11610 which indicates that one or more filters caused the transaction to be pended awaiting your review Fraud Management Filters June 23 2009 37 Ea Customizing Websites to use Fraud Management Filters Handling FMF Errors in Payment API Operations e Ifthe acknowledgement status is not Success or SuccessWithWarning check for error code 11611 which indicates that one or more filters caused the transaction to be denied The following SOAP example shows
30. erify the billing address The filter corresponds to AVS response codes I G R S U and E When AVS is not available to double check the address you may be more susceptible to fraud Although AVS is supported by most credit cards in the United States it is not supported by all cards worldwide The Address Verification Service unavailable filter applies to Direct Credit Card and Virtual Terminal payments Not all merchants are eligible for this filter contact PayPal for more information if you want to use this filter Card Security Code Mismatch Filter This filter screens for payments that do not include a correct Card Security Code This corresponds to Virtual terminal response code N The card security code is a three or four digit number usually found on the signature panel of a card This fraud management tool has various names Visa calls it CVV2 MasterCard calls it CVC2 and American Express calls it CID The Card Security Code filter compares the number provided by the customer to the number on file with the issuer A valid Card Security Code helps verify that your customer has a physical card with them when they place an order An invalid code could be the result of a customer s typographical error or it could indicate that a fraudster did not have the card with them when they placed the order The Card Security Code filter applies to Direct Credit Card and Virtual Terminal payments Not all merchants are eligible for this filter contact
31. formation Card Type Visa Credit Card Number XXXX XXXX XXXX 6052 Shipping Information No shipping information has been specified Risk Management Filters Risk Filters Triggered Unconfirmed Address Reason Your filter selection has denied this transaction Edit your Fraud Management Filters NOTE You are not required to accept or deny the payment immediately You can start a new transaction in which case you can view the transaction history or details and accept or deny the original payment later If you accept the payment Virtual Terminal processes the transaction normally Fraud Management Filters June 23 2009 23 Eg Using Fraud Management Filters Using Fraud Management Filters with Virtual Terminal Virtual Terminal Transaction Success Secure Tranzection Py The transaction has beer successfally proc ssec Recelpt ID 0C9_ 9385 2225 8852 Details Transacliun Type Sal Net Order Amount 20 CC LSD Shipping C 0C JSD Tax Amount C 0C JSD Intal 7U UU USD If you deny the payment Virtual Terminal does not process the transaction Virtual Terminal Transaction Failure Secure Transaction The transaction has NOT been processed Details Transaction Type Sale Net Order Amount 20 00 USD Shipping 0 00 USD Tax Amount 0 00 USD Total 20 00 USD Credit Card Information Card Type Visa Credit Card Number XXXX XXXX XXXX 6052 Shipping Information No shipping information has been specified
32. ilure Because a payment cannot be captured until it is taken out of the pending state a capture failure may occur because the transaction was pended or it may occur for some valid reason You must be able to distinguish between different kinds of failures e Your shipping process must not allow shipping before the payment has been accepted If the payment status is Pending you must ensure that you do not ship merchandise until you review the transaction You can use the PayPal website or the ManagePendingTransactionStatus PayPal API operation to either accept or deny pending transactions NOTE Pending payments are held 30 days unless explicitly denied or accepted After 30 days a pending payment is automatically reversed e Ifyou use Direct Payment Recurring Billing for Website Payments Pro merchants your subscription creation process must handle a SuccessWithWarning acknowledgement and associated return codes Specifically it must handle the situation in which only the first payment is pended payments thereafter will not be placed in pending If you cannot accept these prereguisites for example if your shipping process would reguire substantial rework you can still use Fraud Management Filters to flag or deny riskier payments which provides you with additional risk review options without changing your site In this case do not set any Fraud Management Filters to Review NVP Example For a pended transaction the NVP respon
33. imple example modifies the DoExpressCheckoutPayment j sp sample in the NVP SDK to support Fraud Management Filters It does not handle the possibility that more than one error code can be returned The changes to the sample are noted 36 June 23 2009 Fraud Management Filters Customizing Websites to use Fraud Management Filters Ell Handling FMF Errors in Payment API Operations String strNVPResponse String caller call strNVPString NVPDecoder decoder new NVPDecoder decoder decode strNVPResponse String strAck decoder get ACK BEGIN CHANGES FOR FRAUD MANAGEMENT FILTERS String strErrorCode decode get L ERRORCODEO S s tring strPaymentStatus decode get PAYMENTSTATUS f strAck eguals SuccessWithWarning 88 trPaymentStatus eguals Pending 88 strErrorCode equals 11610 insert code to record this transaction as pending Review else END CHANGES if strAck null amp amp sStrAck eguals Success strAck eguals SuccessWithWarning session setAttribute response decoder response sendRedirect APIError jsp return Handling FMF Errors in Payment API Operations When you use Fraud Management Filters programatically you must check for errors reported by a filter in the response to the DoDirectPayment DoExpressCheckoutPayment DoReferenceTransaction and BillUser API operations If you
34. is filter screens for payments based on the number of items a customer purchases by identifying transactions that exceed the specified number of items purchased at your business Fraudsters usually try to purchase as much as they can before the stolen cards they use are cancelled An unusually high item count may indicate potential fraudulent activity Fraudsters freguently attempt to order large numbers of attractive items that can be easily resold The large order number filter applies to Direct Credit Card and Virtual Terminal payments Total Purchase Price Minimum Filter This filter overrides other filter actions if the transaction falls below a minimum total transaction amount including tax shipping and handling fees If the transaction amount is below the amount set for this filter the payment is automatically accepted overriding any other filter that would have set aside this transaction for your review Merchants with an especially high transaction volume can use this filter to reduce the number of transactions that their staff must review Transactions below the amount you specify are accepted without further analysis This filter applies to Direct Credit Card and Virtual Terminal payments IP Address Velocity Filter This filter screens for multiple payments that originate from the same IP address by checking for repeated transaction attempts from the same computer or network A high number of orders from a single IP address may be as
35. lters With IPN Fraud Management Filter actions are reported in IPN payment messages only when a filter causes the payment to be pended awaiting your review or a when you accept or deny a filter pended payment Filter actions are not reported when filters flag payments for review allow payments to be accepted or cause them to be denied When a payment occurs an IPN message shows the transaction s payment status as Completed regardless of whether a Fraud Management Filter was activated or not There is no special notification for transactions that are flagged by a Fraud Management Filter If a Fraud Management Filter is set to Deny PayPal does not send an IPN message when the filter actually causes the payment to be denied When a transaction is pended however PayPal sends an IPN message containing one or more fraud management pending filters n variables which identify the filters that caused the payment to be pended where n 1 specifies the first filter and so on In addition the payment status variable is set to Pending The following example shows an IPN message in which two filters cause the transaction to be pended Fraud Management Filters June 23 2009 31 Ea Customizing Websites to use Fraud Management Filters Using Fraud Management Filters With IPN txn type virtual terminal payment date 17 11 42 Jul 15 2008 PDT last name receipt id 3075 7371 4622 1677 residence country US pending reason address item
36. lters universe includes all payments otherwise the Fraud Management Filters universe includes all payments above the amount specified by this filter NOTE This filter is also the only filter that uses Accept to indicate that the filter does not deny payments less than the specified amount Consider the following example in which the Total Price Minimum filter is set to Accept for 10 In this case a 10 payment will be accepted and other filters will not be executed If the payment was for 11 other filters execute Fraud Management Filters June 23 2009 11 EGA Introducing Fraud Management Filters Fraud Management Filters Examples Transaction Total Purchase Price Acc pl the Minimum A payment JL Using Multiple Filters If you enable more than one filter the filters are applied in the order determined by the kind of payment method until one of them causes the payment to be accepted or denied If all filters have been applied and the transaction has not been pended for review it is automatically accepted For information about the order in which filters are applied see Fraud Management Filters Operating Principles Consider the four filters in the following diagram which are shown in the order used for Direct Credit Card and Virtual Terminal payments 12 June 23 2009 Fraud Management Filters Introducing Fraud Management Filters ll Fraud Management Filters Examples Transaction Total Purchase Price Mi
37. n has been specified Process Transaction Cancel In this example the maximum amount filter automatically denies the payment because it exceeds 100 26 June 23 2009 Fraud Management Filters Using Fraud Management Filters js Using Payment Fraud Search Virtual Terminal Transaction Failure Secure Transaction Y A 11611 Transaction blocked by your settings in FMF Processor Response Code 0000 AVS X Address and Whole Zip Match Reference 41881046BB4A8N The transaction has NOT been processed Details Transaction Type Sale Net Order Amount 100 00 USD Shipping 10 00 USD Tax Amount 0 00 USD Total 110 00 USD Credit Card Information Card Type Visa Credit Card Number XXXX XXXX XXXX 6052 Shipping Information No shipping information has been specified Risk Management Filters Risk Filter Triggered Maximum Transaction Amount Using Payment Fraud Search You can use the Fraud Management Filters transaction search capability to help detect payment fraud You can search the transaction history for filtered transactions To search select Fraud Activity as the history you want to show and select any ofthe triggers shown below Fraud Management Filters June 23 2009 27 Eg Using Fraud Management Filters Using Payment Fraud Search History History Basic Search View up to three months of Advanced Search monthly account statements Search for Filtered Transactions Search
38. n to be denied if DPRes FMFDetails DenyFilters null for int x 0 x lt DPRes FMFDetails DenyFilters Length x Fraud Management Filters June 23 2009 39 Ea Customizing Websites to use Fraud Management Filters Migration From Risk Controls Useful information to be kept DPRes FMFDetails DenyFilters x Description DPRes FMFDetails DenyFilters x Id DPRes FMFDetails DenyFilters x Name else Unexpected ACK type Log response and inform the buyer that the transaction must be manually investigated Migration From Risk Controls Unlike Risk Controls Fraud Management Filters do not return risk related error codes for the DoAuthorization and DoCapture API operations If you have previously programmed checks for risk controls after these operations you may need to change your business logic You must handle error codes related to FMF in the response of the DoDirectPayment DoExpressCheckoutPayment DoReferenceTransact ion and BillUser API operations These error codes are different than error codes associated with Risk Controls 40 June 23 2009 Fraud Management Filters Fraud Management Filters Summary Fraud Management Filters includes both basic and advanced filters e Kinds of Fraud Management Filters e Basic Fraud Management Filters e Advanced Fraud Management Filters Kinds of Fraud Management Filters The filters you can use are determined by agr
39. name payment gross 3 33 mc currency USD business acgrte 1215804264 bizGgmail com payment type instant verify sign APYUGJhXGkUmvFnZf4I5co6CedKKAowZjfT4T7GXWJMDnZOuFLkcg oH payer status unverified test ipn 1 fraud management pending filters 1 tax 0 00 txn id 5XN64179EB804362B fraud management pending filters 2 guantity 1 first name receiver email acgrte 1215804264 biz gmail com payer id PUWAJRBB8NM74 receiver id 2RXLTRMGT3M2G item number payment status Pending shipping 0 00 34 33 Maximum Transaction Amount Unconfirmed Address mc gross custom charset windows 1252 notify version 2 4 NOTE Ifthe transaction is for an authorization or an order the auth status variable may also be set to Pending If a transaction has been pended PayPal sends an IPN message when the payment has been accepted or denied The following example shows an IPN message indicating that a pended transaction has been accepted 32 June 23 2009 Fraud Management Filters Customizing Websites to use Fraud Management Filters Using Fraud Management Filters With IPN txn type virtual terminal payment date 17 11 42 Jul 15 2008 PDT last name receipt id 3075 7371 4622 1677 residence country US item name payment gross 3 33 mc currency USD business acgrte 1215804264 bizGgmail com payment type instant verify sign AFCWxV21C7fd0v3bYYYRCpSSR131AjcbYkD VCCBmpD41Zq
40. nduct business Review Pend the payment for your review Use this setting when you want to evaluate the transaction and make an explicit decision whether to accept or deny the payment Flag Accept the payment and flag it for later examination Use this setting for testing a filter or when you are not sure you want review the payment but want an easy way to locate the payment should you decide to look at it Fraud Management Filters Setup Strategy You enable the Fraud Management Filters that your experience suggests will be most predictive of fraud By default Fraud Management Filters are not enabled Consider an example in which your experience indicates that orders whose total amount exceed a threshold amount are unusual It may indicate that the buyer does not really care about the size of the order because the order is not actually legitimate in this case it could be an attempt to obtain merchandise by fraud Depending on how much you rely upon the belief that a specific transaction characteristics are indicitive of fraud you specify one of the following actions on the Edit My Filters Settings page e_ Flag the transaction in which case the transaction is accepted however you can conveniently view the transaction on PayPal later and if you believe that the transaction might be fraudulent you can reverse the payment and not ship the reguested merchandise e Review the transaction if it exceeds the threshold amount in whi
41. needs dictate how you use these and other filters to reduce risk to a manageable level without significantly increasing the effort reguired to process an order You need not use the same filters shown in the examples and you can take different actions if you do use them The following items are just some of the alternatives for you to consider e You may decide not to use the Total Purchase Price Minimum filter or use it with a lower transaction value e You may decide to pend transactions from high risk countries rather than deny their payments e You may decide to flag high value transactions rather than pend them for review Setting up Fraud Management Filters reguires both experimentation and iteration Merchants With Third Party Shopping Carts Merchants that use a shopping cart provider should consult with their vendor about their level of support for Fraud Management Filters You can use Fraud Management Filters with a third party shopping cart You should check with your vendor about their level of support for Fraud Management Filters because the business procedures you use to review transactions may be different depending on your shopping cart s level of support For example your cart vendor may support all features of Fraud Management Filters in which case you would review and accept or deny payments from their service If your cart vendor does not provide any additional support for Fraud Management Filters you will need to
42. nimum Penc the transaction for review Maxmum Transaction Amount Card Security Code F ag the Mismatch transaction Review the transaction No Accept the Accept No Deny the ayment ment 1 Ifthe total amount of the transaction is less than the amount specified by the Total Purchase Price Minimum filter the payment is accepted and processing stops otherwise the next filter is applied lead Fraud Management Filters June 23 2009 13 14 Introducing Fraud Management Filters Merchants With Third Party Shopping Carts 2 Ifthe total amount of the transaction is greater than the amount specified by the Maximum Transaction Amount filter the transaction is pended awaiting review regardless of whether the transaction is pended the next filter is applied 3 If the transaction s country of origin matches a country specified by the Country Monitor filter the payment is denied and processing stops otherwise the next filter is applied 4 If the customer s credit card security code does not match a valid code the Card Security Code Mismatch filter flags the transaction and processing continues the next filter is applied 5 When there are no more filters to apply and the transaction has not been pended the payment is accepted otherwise you must decide whether to accept or deny the payment Modifying the Examples to Meet Your Needs These examples use specific filters which are set to take specific actions Your
43. on Pend the transaction for review Maximum Transaction A transaction is pended when the maximum transaction amount specified by the filter is exceeded which in this example is 1 000 meaning that these transactions await a decision whether to accept or deny the payment Other filters execute because the payment has neither been accepted or denied When there are no more filters to execute and another filter has not caused the payment to be denied or approved a pended transaction is ready to be reviewed The following diagram shows this logic Fraud Management Filters June 23 2009 9 EGA Introducing Fraud Management Filters Fraud Management Filters Examples Transaction last filter Review the transaction Deny the payment e from the PayPal website You examine the transaction details Accept the payment You can review a transaction and accept or deny a payment e from your website or application by using the ManagePendingTransactionStatus API operation for more information see the Name Value Pair API Developer Guide and Reference or SOAP API Developer Reference e from your shopping cart vendor if they provide this feature for you Denying Transactions From High Risk Countries In this example consider a scenario in which your experience indicates that transactions originating from some countries have always been attempts to defraud You can set the Country Monitor filter to deny payments from the
44. r of the many kinds of filters provided by PayPal e Maximum Transaction Amount filter which identifies transactions whose value exceeds a specified amount e Country Monitor filter which identifies transactions based on the country of origin e Card Security Code Mismatch filter which identifies transactions with differences in the credit card security code e Total Purchase Price Minimum filter which identifies transactions that are less than a specified amount June 23 2009 Fraud Management Filters Introducing Fraud Management Filters Fraud Management Filters Examples The Maximum Transaction Amount filter and the Country Monitor filters are examples of basic filters which are available to business account holders and Website Payments Pro merchants The Total Purchase Price Minimum filter and Card Security Code Mismatch filter are examples of advanced filters which are available to Website Payments Pro merchants at additional cost Reviewing High Value Transactions In this example consider a scenario in which your average transaction amount is 100 and you seldom expect orders over 1 000 Although you have received large orders before you want to verify for yourself that the order is legitimate and not an attempt to defraud you of merchandise In this case you could set the Maximum Transaction Amount filter to Review for transactions over 1 000 The following diagram shows the effect of pending a transaction Transacti
45. se countries as shown in the following diagram Transaction Country Monitor Deny the payment 10 June 23 2009 Fraud Management Filters Introducing Fraud Management Filters Fraud Management Filters Examples Filtering stops ifthe payment is denied Ifthe transaction originates from a country not on the list filtering continues Flagging Transactions With Invalid Card Security Codes In this example consider a scenario in which your experience indicates that customers routinely mistype their credit card security code however in some cases it is not an honest mistake and can indicate fraud Before you decide to review or deny this kind of payment you may decide to flag them first After reviewing the flagged transactions you can decide if further action is necessary In this case you could set the Card Security Code Mismatch filter to Flag which would flag the transaction Transaction Card Security Code Flag the Mismatch transaction Regardless of whether the transaction has been flagged the next enabled filter is applied Flagging a transaction does not approve or deny a payment or pend the transaction for review Accepting Transactions Using the Total Price Minimum Filter For the purpose of thinking about the operation of filters the Total Price Minimum filter determines the universe of payments on which the other filters operate If the Total Price Minimum filter is not enabled the Fraud Management Fi
46. se would contain PAYMENTSTATUS set to Pending and the response would also contain the following fields ACK SuccessWithWarning ERRORCODE0 11610 L SHORTMESSAGEO Payment 20Pending S20your 20reviews20ins20Fraud OManagement 20Filters ONGMESSAGE0 SEVERITYCODEO Warning Fraud Management Filters June 23 2009 35 Ea Customizing Websites to use Fraud Management Filters Detecting Pending Transactions Using the PayPal API SOAP Example The SOAP response would contain PaymentStatus set to Pending and the response would also contain the following fields lt ack gt lt value gt lt m value gt SuccessWithWarning lt m value gt lt value gt lt ack gt lt errors gt lt com paypal soap api ErrorType gt lt shortMessage gt Payment Pending your review in Fraud Management Filters lt shortMessage gt lt longMessage gt lt longMessage gt lt errorCode gt lt m value gt l1610 lt m value gt lt errorCode gt lt severityCode gt lt value gt lt m value gt Warning lt m value gt lt value gt lt severityCode gt lt __ hashCodeCalc gt false lt __ hashCodeCalc gt lt com paypal soap api ErrorType gt lt errors gt Detecting Pending Transactions Using the PayPal API You must detect an acknowledgment status of SuccessWithWarning and an error code of 11610 to identify a pending transaction The payment status should be Pending The following s
47. ser interface marks the transaction when it is displayed in the PayPal website A flagged payment is not pended Another filter may cause a flagged payment to be accepted denied or pended When a payment is set aside for review the associated transaction enters the pending state You must accept for deny the payment before the transaction can complete NOTE If you do not make a determination within 30 days PayPal automatically returns the funds to the buyer June 23 2009 Fraud Management Filters Fraud Management Filters Operating Principles Fraud Management Filters Pending State Operation Supported Transaction Flows for Review Action The kind of flow determines whether a payment can be marked as pending your review not all flows support the Review action Only payments made during specific transaction flows can be set aside for review Payments occurring outside of these flows are either accepted or denied If the flow does not support the Review action reguests for review are ignored however these payments are flagged so that you can view them from the PayPal website The following transaction flows enable PayPal to pend a payment for review e Web Site Payments Standard for Buy Now and shopping carts e_ Express Checkout e Virtual Terminal e Mass Pay e_ Credit Card Recurring Transactions e Web Accept Express e Send Money Capturing Pending Payments You cannot capture a payment that was placed in the pending state by
48. shipping addresses for matches with the countries you specify Orders from customers in some countries can have a relatively higher incidence of fraud especially where it is difficult to authenticate information about residents of the country The Country Monitor filter applies to all payments Advanced Fraud Management Filters Advanced Fraud Management Filters which are optional provide additional protection aimed at detecting fraud in credit card payments Advanced Fraud Management Filters are only available with Website Payments Pro You can upgrade to these filters on PayPal If you no longer want advanced fraud management filters you can downgrade by contacting PayPal customer support Card and Address Validation Filters You can filter transactions based on address information or credit card security code Address Verification Service No Match Filter This filter screens for payments for which the billing address entered by your customer doesn t match the information maintained by the card issuer as determined by the Address Verification Service AVS This filter corresponds to AVS response codes N or C AVS June 23 2009 Fraud Management Filters Fraud Management Filters Summary Advanced Fraud Management Filters compares the street number and zip code entered by the customer with information maintained by the card issuer An AVS match helps verify that the customer using the credit card is the owner of the card Failure
49. sociated with a fraudster making repeated purchases on your website A fraudster may repeatedly attempt transactions through an automated script that tests unknown card numbers or may attempt to make many small purchases through multiple stolen cards to bypass other filters Legitimate customers typically don t perform multiple transactions in guick succession however some Internet Service Providers ISPs may use a single IP address for all of their customers computers You can choose to ignore IP addresses from these ISPs so that payments originating with them will not be filtered The IP address velocity filter applies to Direct Credit Card and Virtual Terminal payments Fraud Management Filters June 23 2009 45 EGE Fraud Management Filters Summary Advanced Fraud Management Filters PayPal Fraud Model Filter This filter screens for payments that would have been declined by PayPal s fraud model PayPal s fraud model identifies potentially risky transactions It is updated dynamically to combat trends and patterns in fraudulent activity around the world The PayPal fraud model filter applies to Direct Credit Card and Virtual Terminal payments Not all merchants are eligible for this filter 46 June 23 2009 Fraud Management Filters Fraud Management Filters Operating Principles In addition to how you set up Fraud Management Filters the operation of Fraud Management Filters depends on the kind of flow the payment method such as b
50. ud Management Filters to manage risk while using Virtual Terminal Consider an example in which your Fraud Management Filter settings are set to deny payments over 100 and to review payments of 10 or more if the address has not been confirmed Parlarmanes Edit Your Filter Settings rch Transacti Resources Edit My Filter Settings Fraud Management Filters flag potentially fraudulent transactions You can indicate whether you would like to Review Deny or Flag transactions To restore PayPal s default settings click Restore Defaults below 1 Select your Fraud Management Filters 2 Choose how to handle filtered transactions and set values if necessary 3 Click Save to activate filters Activate Filter Name Filter Action Value Basic Fraud Management Filters USD 2 Maximum Transaction Amount Deny vi mo ss USD BE unconfirmed Address Review ki no When you enter a transaction for 20 net using Virtual Terminal the payment is pended and you are prompted to accept or deny the transaction June 23 2009 Fraud Management Filters Using Fraud Management Filters ui Using Fraud Management Filters with Virtual Terminal Virtual Terminal Transaction Pending Secure Transaction 8 The transaction has not been processed Receipt ID 0091 9385 2325 8862 Order Details Transaction Type Sale Net Order Amount 20 00 USD Shipping 0 00 USD Tax Amount 0 00 USD Total 20 00 USD Credit Card In
51. w The following diagram conceptually shows how Fraud Management Filters work in three steps Fraud Management Filters June 23 2009 Introducing Fraud Management Filters Fraud Management Filters Examples O 2 9 ea Y a Review or flag W N F NW Deny en 1 Configure your Fraud Management Filters to flag hold for review or deny riskier payments 2 Based on your settings your filters review incoming payments 3 Your filters automatically flag deny or hold payments for review typically most payments are accepted because they do not show characteristics indicating fraud A flexible fraud management configuration enables you to select the filters to use and to test your strategy before denying payments or pending transactions for review Advantages of using Fraud Management Filters include e time savings from having the computer do more to review transactions and review them consistently which allows you to focus on transactions that are truly risky e cost savings from identifying potentially risky transactions which reduces chargebacks and lowers your cost of doing business e more accepted payments because you apply rules evenly with greater accuracy Fraud Management Filters Examples These examples show ways to configure Fraud Management Filters to flag or review transactions and accept or deny payments You must configure your filters before they take effect Consider an example using fou
52. y Express Checkout Direct Credit Card or Virtual Terminal and interaction with other PayPal fraud protection services e Fraud Management Filters Operation With Direct Credit Card and Virtual Terminal Payments e Fraud Management Filters Operation With Other Payment Transactions e Fraud Management Filters Pending State Operation Fraud Management Filters Operation With Direct Credit Card and Virtual Terminal Payments Both basic and advanced Fraud Management Filters can be used on Direct Credit Card or Virtual Terminal transactions For Direct Credit Card or Virtual Terminal transactions PayPal applies the filters you enable in the following order 1 Total Purchase Price Minimum filter Maximum Transaction Amount filter Unconfirmed Address filter Country Monitor filter Large Order Number filter 2 3 4 5 6 Billing Shipping Address Mismatch filter 7 Zip Code filter 8 Suspected Freight Forwarder filter 9 IP Address Velocity filter 10 Email Address Domain filter 11 Bank Identification Number filter 12 IP Address Range filter 13 PayPal Fraud Model filter 14 Address Verification Service No Match filter Fraud Management Filters June 23 2009 48 Fraud Management Filters Operating Principles Fraud Management Filters Operation With Other Payment Transactions 15 Address Verification Service Partial Match filter 16 Address Verification Service Unavailable or Not Supported filter 17 Card Security Cod
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