Why a single fraud score threshold is the wrong approach for every product

A fixed fraud score threshold is often applied uniformly across a product, but the cost of an error varies significantly depending on the action being protected. Blocking a newsletter signup incorrectly is a minor loss, while blocking a legitimate password reset can drive away a paying customer and generate support costs. Experts suggest calculating the trade-off between false positives and false negatives before choosing any number, rather than relying on vendor defaults. Using three decision bands instead of two allows borderline cases to be routed to step-up verification methods, reducing harm in ambiguous situations. A key unsolved challenge is measuring false rejections, since declined legitimate users simply leave without generating any visible data in dashboards.