Definition
Velocity checks are fraud and security prevention methods that trace the frequency of particular transactions or tasks in a system. If the frequency passes a predetermined threshold, it triggers an alert or blocks the system from performing further actions.
How Do Velocity Checks Work?
- Identifying relevant data points: Multiple techniques exist to examine historical data and identify which activities indicate fraudulent behavior in every setting, such as machine learning.
- Making a velocity rule: This may comprise any combination of timeframes and data points based on conclusions reached in the first step.
- Use the velocity rule: The service runs continuous velocity checks to examine consumer behavior.
- A pre-set result is activated when the predetermined conditions in a velocity check are satisfied. For instance, asking users to re-enter passwords, allotting a higher risk score to the consumer, or blocking a customer from completing a transaction through transaction tracking.
Afterward, data analysts may add, amend, or remove these rules as required.
Examples of Velocity Check
- Credit card purchases: If anyone attempts to make huge acquisitions within a short duration using the same credit across various online platforms, a velocity check can flag it as suspicious, potentially naming it a stolen card.
- Account sign-ins: The velocity check can block access to an account if login attempts exceed specific times.
- Money transfers: A velocity check can block an attempt to transfer multiple high-value money transfers.
Velocity Checks Applications
- Banking and finance: Checking for multiple transactions within a short period to stop fraud or unauthorized access.
- E-commerce: Monitoring regular logins or purchases from an IP address or single user to identify account takeover or fraud.
- Website security: Detecting rapid-fire sign attempts, indicating a possible brute-force attack.
- Telecommunications: Viewing high-frequency call patterns, signals, SIM card cloning, or other fraud.
- Online gaming: Helps to stop bot-driven tasks by tracking the rate of particular in-game actions.
