Plastic card fraud detection using peer group analysis
Authors: Weston, David1; Hand, David2; Adams, Niall3; Whitrow, Christopher2; Juszczak, Piotr2
Source: Advances in Data Analysis and Classification, Volume 2, Number 1, April 2008 , pp. 45-62(18)
Publisher: Springer
Abstract:
Peer group analysis is an unsupervised method for monitoring behaviour over time. In the context of plastic card fraud detection, this technique can be used to find anomalous transactions. These are transactions that deviate strongly from their peer group and are flagged as potentially fraudulent. Time alignment, the quality of the peer groups and the timeliness of assigning fraud flags to transactions are described. We demonstrate the ability to detect fraud using peer groups with real credit card transaction data and define a novel method for evaluating performance.Keywords: Fraud detection; Outlier detection; Peer groups; 62P30; 62H30
Document Type: Research article
DOI: 10.1007/s11634-008-0021-8
Affiliations: 1: The Institute for Mathematical Sciences, Imperial College London, London, SW7 2PG, UK, Email: david.weston@imperial.ac.uk 2: The Institute for Mathematical Sciences, Imperial College London, London, SW7 2PG, UK 3: Department of Mathematics, Imperial College London, London, UK

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