This filter compares the Ship To and Bill To ZIP codes against a high-risk list managed by PayPal. PayPal determines high-risk ZIP codes based on analysis of millions of e-commerce transactions. The high-risk ZIP code list applies only to U.S. ZIP codes.
The specified action is taken whenever a submitted ZIP code appears in the PayPal risk list.
Fraud tends to correlate to densely populated areas like major cities. For this reason, ZIP codes on the risk list will likely correlate to major cities.
To learn more about PayPal's Risk List, click here.
Matching a ZIP code on the risk list does not necessarily indicate a fraudulent purchase, but that you should evaluate these transactions more closely than other transactions.