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From FraudWiki

Welcome to the Fraud Detection and Prevention Wiki

The purpose of this Wiki is to provide a source of information on the many different types of fraud and the techniques available to organisations for detection and prevention. As the methods of fraud become more sophisicated and complex so the use of modern statisical techniques to detect and predict fraud become more important. This Wiki attempts to bring together information on this rapidly developing subject.

The Wiki is still under-development and will be set loose in April 2007. In the mean time, if you have any suggestions we would welcome your ideas: see FraudWiki:About.

1 The Fraud Detection problem
2 Types of Fraud
3 Detection Techniques
4 Measuring Performance
5 Key Organisations
6 Latest News
7 Search

The Fraud Detection problem

The problem of Fraud detection has several key characteristics:

Fraud is rare. Typically less than 0.1% of the transactions are fraudulent in the case of Card Fraud. This means that there are very few examples of fraud in the data. The data is said to be highly skewed and this is the root cause of many of the problems associated with this class of problem sometime known as Rare Event or Anomaly detection.

Reliability of the data. The marking (aka tagging) of transactions as being fraudulent is usually a manual task and is often subject to various sources of error. These errors effectively introduce a level of ‘noise’ into the data. This can be a major problem.

Measuring success. The overall effectiveness of a rare event detection system means very little. In the case of fraud detection, even if it missed all the fraud it could still be claimed to be 99.9% accurate. The application of good metrics is essential when evaluating these systems. The same is true when measuring the error-rate of the system.

Types of Fraud

Detection Techniques

An overview of some of the detection techiques:

Detection Techniques

Measuring Performance

Measuring the performance of classifiers of rare events needs care. The article below provides an introduction to some of the issues and how to deal with them.