How to Reduce False Positives
Without Letting Fraud Through
Fraud detection teams walk a constant tightrope. If you tune your filters too loosely, you lose money to chargebacks. If you tune them too tightly, you lose money to declined customers.
This second category—False Positives—is the silent revenue killer. Studies show that 33% of legitimate consumers will never return to a retailer after a false decline. You aren't just losing one sale; you are losing a lifetime of value.
The Hidden Cost of "Binary" Rules
Most legacy fraud systems operate on "Rules." For example: "Block all traffic from data centers."
This is effective, but it's a blunt instrument. It blocks the botnet hosted on AWS, but it also blocks the corporate employee browsing through their company VPN. It blocks the fraudster, but also the privacy-conscious shopper using iCloud Private Relay.
150 Real Customers
Binary rules throw the baby out with the bathwater.
A Better Way: Context-Aware Scoring
CandycornDB solves this by replacing binary rules with Risk Scoring.
We analyze the context of the IP to determine intent.
- Is this Datacenter IP behaving normally? If an AWS IP is just browsing pages at human speed, it might be a corporate VPN. Score: 20 (Low).
- Is this Residential IP behaving aggressively? If a Comcast IP is hitting your login API 50 times a second, it's a compromised device. Score: 95 (High).
The Revenue Impact
By switching from binary blocks to risk scoring, our customers typically see a 15-20% increase in approved transactions from high-risk regions or networks, without an increase in fraud rates.
How to Implement "Grey Zone" Logic
Don't just Block or Allow. Use the "Grey Zone" (Score 50-75) to ask for more proof.
// Example Logic
if (score > 85) {
return "BLOCK"; // Obvious Fraud
} else if (score > 50) {
return "REVIEW"; // Ask for 3D Secure / 2FA
} else {
return "ALLOW"; // Frictionless Experience
}
Final Thoughts
You don’t have to choose between blocking fraud and making money. By using granular, real-time data, you can build a system that is hostile to bots but welcoming to humans—no matter what network they use.