Person-to-Person Transaction Risk Rating System
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Solution Overview
Problem
In person-to-person transactions, buyers and sellers often face uncertainty due to lack of objective risk assessment, as existing systems fail to provide comprehensive risk ratings based on credit score, criminal record, and employment history, leading to increased risk for both parties.
Innovation Solution
A system that generates a risk rating for individuals by authenticating personal and history information, using pre-set criteria to score credit, criminal, and employment data, and provides access to this rating for reviewers, along with an optional transaction guarantee.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If existing rating systems are used, then some performance information is available, but the risk assessment is insufficient and not based on objective data
Solution Approach 1:
The patent introduces a third-party risk rating system that acts as an intermediary between buyers and sellers. This independent system collects, verifies, and evaluates objective data (credit scores, criminal records, employment history) to generate unbiased risk ratings, resolving the contradiction by providing reliable risk assessment through an impartial mediator rather than relying on self-reported or seller-only information.
Solution Approach 2:
The system performs preliminary risk assessment by collecting and evaluating objective data about individuals before transactions occur. By obtaining credit scores, criminal records, and employment history in advance and generating risk ratings beforehand, the system enables informed decision-making prior to transactions, rather than relying on post-transaction feedback alone.
2Measurement precision
If comprehensive background checks are performed, then risk assessment accuracy improves, but system complexity and cost increase
Solution Approach 1:
The patent segments the risk assessment process into distinct components: credit score evaluation, criminal record checking, employment history verification, and overall risk rating generation. Each component handles specific types of data independently, allowing the system to achieve comprehensive and accurate risk assessment through modular, manageable segments rather than attempting to process all information in a single complex system.
3Reliability
If no risk rating system is implemented, then transaction simplicity is maintained, but uncertainty and risk between parties increase
Solution Approach 1:
The system provides feedback in the form of risk ratings that are communicated to both buyers and sellers before transactions occur. This feedback mechanism enables parties to make informed decisions about whether to proceed with transactions based on objective risk assessments, thereby increasing transaction safety without significantly complicating the transaction process itself.
Data Source
AI summary
Embodiments of the present invention provide a system for determining a risk rating associated with a subject to support a person-to-person transaction. The system includes a profile device in communication with a database that includes personal information and history information associated with the subject. The profile device includes a profile engine stored on a computer-readable medium. The profile engine can access the personal information to authenticate the subject and access the history information to generate a risk rating for the subject. The risk rating is generated by scoring the history information using pre-set criteria. The profile engine can output the risk rating to a reviewer identified by the subject.