Scribd
Upload
74 views5 pages

Credit Card Fraud Detection: Title

Credit card fraud detection is an important problem due to the rise of online transactions. This project focuses on machine learning algorithms like random forest and Adaboost to detect fraudulent credit card activities based on accuracy, precision, recall, and F1-score. The random forest and Adaboost algorithms are compared to determine the best for detecting fraud. The mechanism first obtains a dataset from Kaggle then analyzes attributes to detect anomalous transactions labeled as fraudulent using machine learning.

Uploaded by

Sandeep Kumar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
74 views5 pages

Credit Card Fraud Detection: Title

Credit card fraud detection is an important problem due to the rise of online transactions. This project focuses on machine learning algorithms like random forest and Adaboost to detect fraudulent credit card activities based on accuracy, precision, recall, and F1-score. The random forest and Adaboost algorithms are compared to determine the best for detecting fraud. The mechanism first obtains a dataset from Kaggle then analyzes attributes to detect anomalous transactions labeled as fraudulent using machine learning.

Uploaded by

Sandeep Kumar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 5

Title: Credit Card Fraud Detection

ABSTRACT
Credit card fraud detection is presently the most frequently occurring problem
in the present world. This is due to the rise in both online transactions and e-
commerce platforms. Credit card fraud generally happens when the card was
stolen for any of the unauthorized purposes or even when the fraudster uses
the credit card information for his use. In the present world, we are facing a lot
of credit card problems. To detect the fraudulent activities the credit card
fraud detection system was introduced. This project aims to focus mainly on
machine learning algorithms. The algorithms used are random forest algorithm
and the Adaboost algorithm. The results of the two algorithms are based on
accuracy, precision, recall, and F1-score. The ROC curve is plotted based on the
confusion matrix. The Random Forest and the Adaboost algorithms are
compared and the algorithm that has the greatest accuracy, precision, recall,
and F1-score is considered as the best algorithm that is used to detect the
fraud.
In this work, almost every simple yet best language programming and
applications (Technology Stack) are used, and are listed as follows.
● PYTHON
● MACHINE LEARNING

● ANACONDA

Review of Literature:
Fraud act as the unlawful or criminal deception intended to result in financial
or personal benefit. It is a deliberate act that is against the law, rule or policy
with an aim to attain unauthorized financial benefit.

Numerous literatures pertaining to anomaly or fraud detection in this domain


have been published already and are available for public usage. A
comprehensive survey conducted by Clifton Phua and his associates have
revealed that techniques employed in this domain include data mining
applications, automated fraud detection, adversarial detection. In another
paper, Suman, Research Scholar, GJUS&T at Hisar HCE presented techniques
like Supervised and Unsupervised Learning for credit card fraud detection.
Even though these methods and algorithms fetched an unexpected success in
some areas, they failed to provide a permanent and consistent solution to
fraud detection.

A similar research domain was presented by Wen-Fang YU and Na Wang where


they used Outlier mining, Outlier detection mining and Distance sum
algorithms to accurately predict fraudulent transaction in an emulation
experiment of credit card transaction data set of one certain commercial bank.
Outlier mining is a field of data mining which is basically used in monetary and
internet fields. It deals with detecting objects that are detached from the main
system i.e. the transactions that aren’t genuine. They have taken attributes of
customer’s behaviour and based on the value of those attributes they’ve
calculated that distance between the observed value of that attribute and its
predetermined value.

Unconventional techniques such as hybrid data mining/complex network


classification algorithm is able to perceive illegal instances in an actual card
transaction data set, based on network reconstruction algorithm that allows
creating representations of the deviation of one instance from a reference
group have proved efficient typically on medium sized online transaction.

There have also been efforts to progress from a completely new aspect.
Attempts have been made to improve the alert-feedback interaction in case of
fraudulent transaction.

In case of fraudulent transaction, the authorised system would be alerted and


a feedback would be sent to deny the ongoing transaction.

Artificial Genetic Algorithm, one of the approaches that shed new light in this
domain, countered fraud from a different direction.

It proved accurate in finding out the fraudulent transactions and minimizing


the number of false alerts. Even though, it was accompanied by classification
problem with variable misclassification costs.
MECHANISM:
The approach that this paper proposes, uses the latest machine learning
algorithms to detect anomalous activities, called outliers.

The basic rough architecture diagram can be represented with the following
figure:

When looked at in detail on a larger scale along with real life elements, the full
architecture diagram can be represented as follows:
First of all, we obtained our dataset from Kaggle, a data analysis website
which provides datasets.

Inside this dataset, there are 31 columns out of which 28 are named as v1-v28
to protect sensitive data.

The other columns represent Time, Amount and Class. Time shows the time
gap between the first transaction and the following one. Amount is the
amount of money transacted. Class 0 represents a valid transaction and 1
represents a fraudulent one.

Advantage:
With this level of control, fraudsters don't have the chance to make multiple
transactions on a stolen or counterfeit card before the cardholder is aware of
the fraudulent activity. This alone can save a significant amount of money that
would traditionally be lost to fraud.

CONCLUSION:
Credit card fraud is without a doubt an act of criminal dishonesty. This article
has listed out the most common methods of fraud along with their detection
methods and reviewed recent findings in this field. This paper has also
explained in detail, how machine learning can be applied to get better results
in fraud detection along with the algorithm, pseudocode, explanation its
implementation and experimentation results.

DEPENDENCIES: Internet Network


Submitted by: -
Group Name (G-1):

1. ABHIJIT ROUT (1701348006) -

2. SWAPNASHREE SAHOO (1701348008) -

3. ABHIJIT MISHRA (1701348015) –

4. SUDEEP NARAYAN SINGH (1701348018) -

You might also like