How A Geolocation Database Helps To Detect Online Fraud And Identity Theft

Posted by db-ip on 2019 Jul 29

Fight Back Against Fraud and Identity Theft with IP Location

It’s everyone’s worst nightmare — someone goes online, pretends to be you and they steal your home title, your credit, your very life. Identity theft has become a serious issue in this age of modern connectivity. Consumers can spend hundreds and even thousands of dollars fighting back and recovering their identities when they become victims to these thieves.

In fact, identity theft of all kinds is on the rise in the United States with an estimated 16.7 million people being affected by identity theft. This is bad both for consumers and for financial institutions. After all, consumers who find themselves locked out of their own credit scores and or facing credit card bills they didn’t accrue often have a hard time proving that they didn’t accrue these debts. Financial institutions can be equally hard hit by these kinds of crimes, with the institution often left holding the bag for what can usually be attributed to carelessness on the part of consumers when it comes to security.

In point of fact, it is estimated that identity theft is responsible for an estimated $107 Billion in losses to businesses all over the United States. Indeed, identity theft has become a leading expense for businesses that deal with credit of any kind. Until recently, there was no easy way to fight back against this kind of crime.

To be fair, most credit card companies and banks have long learned to test IP locations (also known as Internet Protocol addresses — a unique number which identifies every computer on the Internet and which can be traced to a specific location) against a given customer’s usual location. When the IP doesn’t match, they will often present some kind of challenge. However, it’s become increasingly easy for sophisticated thieves to gather someone’s mother’s maiden name or other sensitive data, which means that these methods are far from foolproof.

Other methods can prove equally problematic, including requiring a national ID number or social security number. These numbers are often easy to obtain and as such provide relatively little protection for both consumers and institutions. Indeed, in many counties, it is quite common for such ID numbers to be used for everyday transactions, making it easy for thieves to steal them.

Enter the Geolocation DB

That’s why geolocation db services, which maintain an extensive database of IP addresses matched to locations worldwide have become so popular. These kinds of services will attempt to match specific addresses to IP addresses that a given computer is using. Unlike the traditional method of identifying an IP address, which can only tell you which country and city a given IP is located in, these kinds of services try to get granular.

A geolocation DB service will actually track individual IP addresses to specific locations. This means that a credit card company or bank or really anyone concerned with protecting sensitive information need not merely guess as to whether or not someone happens to be on vacation. They can instantly look up who lives at a given location and challenge the person contacting them to explain where they are and why they are located there.

This kind of power was once the exclusive purview of government authorities which could compel an ISP to provide the address behind a specific IP. The trouble, of course, was that in order to do this, they would need to request a court order and then engage in a laborious process that takes precious time. This is the time that a thief can use to disappear with the bank’s money, leaving consumers frustrated and banks and other institutions with severe losses.

Today, however, with the rise of new geolocation DB services, such institutions can proactively protect themselves by instantly looking up the information regarding a specific IP address that a customer is connecting from. In fact, these kinds of services have become so sophisticated that it’s possible to use the DB-IP Geolocation API to integrate your software directly with the database so that the interaction will become seamless.

How DB-IP Geolocation API Works

An API or Application or Application Programming Interface is a specific set of rules that allow two different computer programs online to talk to each other. The concept is simple — create a set of unique identifying keys, one public and one private. The software will generate both keys and require a public key to be made available which can be used to decrypt the private key. This way, it’s impossible to spoof a DB-IP Geolocation API. Because each public/private key combination is unique, there is no way to randomly guess or fool the computer into thinking that it has connected with the genuine article.

Indeed, it’s possible to use these kinds of API integrations to obtain real-time threat assessments for a given connection. This means that you can proactively look for threats of all kinds and prevent them from taking root before they ever begin.

Who Provides Such Services?

There are many companies that provide IP Geolocation API that is required to create this seamless ‘handshake’ between two computers but one of the leading companies in the field is DB-IP. They maintain a world-class database of IP addresses which is specifically designed to fight back against identity theft. The database at is constantly updated and is designed to allow for seamless integration with a bank or other financial institution, allowing for instant access to the database.

Moreover, when you connect your own system to that of, you are able to proactively seek out potential threats. The database maintains a list of known cyber thieves and can proactively alert your own system that an attack is taking place, stopping it from happening before it even begins.

What Consumers Can Do

Of course, as good as these kinds of services are, they still require consumers to do their part. That means maintaining their passwords in a highly secretive manner so that they can prevent the possibility that they will fall into unscrupulous hands. Another method that consumers may want to consider using, which can work quite well in concert with such IP database technology is called two-factor identification.

Two-factor identification means that every time that a consumer attempts to log into their account, a special code is texted to their cell phone or email which must be entered in order to continue. This can largely prevent identity theft crimes. However, even with two-factor identification, it’s possible for thieves to gain access to sensitive information and or to spoof cell phones and guess email passwords, which means that it’s up to the institutions in question to sign up for database which can proactively protect their customers.

It’s Up to Institutions to Train Customers

Consumers often resist such restrictive services as IP database searches as a violation of privacy. Moreover, they are often resistant to using two-factor identification because of the inconvenience they cause. While institutions may ultimately be legally responsible for any losses that occur as a result of identity theft, they are under no obligation to serve consumers who don’t care about security.

Indeed, many financial institutions may be well served to sever ties with problematic customers who are directly responsible for losses, even if the losses occurred as a result of identity theft. IP databases can also be used to help with these kinds of cases by flagging problematic customers who may choose not to secure their identities properly. Banks and other financial institutions can then use these kinds of databases to fight back and prevent such customers from joining.

Legal Concerns

Many institutions may also be concerned regarding the legality of using IP databases. While we always recommend contacting an attorney to discuss specific laws in your region, as a rule, these databases are maintained based on publicly available records. This means that generally, there is no legal violation of the right to privacy.

Other Uses

Of course, while we have focused here on identity theft and preventing fraud, there are other uses for such databases. For example, it’s possible to pull up publicly available information about a prospective client instantly using these kinds of databases when they first contact your institution. This means that you can instantly personalize a conversation based on where a given customer may be calling from and you can also have some data already at your fingertips when they contact you.

Bottom Line

The bottom line is that technology has created the problem of identity theft. It is widespread and it is not going away any time soon. However, with smart technology, institutions can fight back and prevent the kinds of losses that identity thieves have managed to inflict over the past few decades as our world has become increasingly interconnected.

We encourage all businesses of all sizes and types to consider the advantages that can come from using a database of IP addresses to ensure that they maintain the highest level of security, both for themselves and for their customers. Ultimately, this will mean higher profit margins, fewer angry customers and more goodwill all around.