Fraud scrubbing is a term that applies to the methods and actions taken by payment-processing service providers to reduce the incidence and risk of online payment fraud. There are a number of financial and technical measures available for cross-checking transactions, and these measures assist merchants in determining whether unusual transactions are genuine or fraudulent. There are also fraud-scrubbing services and systems available that automate this process.
Some of the technical methods used in fraud scrubbing include geolocation, IP address verification, and transaction velocity checking. Geolocation allows a fraud-scrubbing program or expert to determine the location at which the transaction is occurring, and to compare it with the billing address given. IP address verification may reveal blacklisted addresses, or determine whether the IP is a recognized proxy. Financial measures used during fraud scrubbing include real-time transaction authorization, review of evidence of previous fraud attempts, the use of card verification codes, address verification, and identification of orders that are unusually large for further scrutiny.