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    Project Synopsis

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    Pragya Mittal
    This document summarizes a student project on developing a credit card fraud detection system using machine learning. It discusses the problems of credit card fraud and increasing financial losses. The objectives are to identify different fraud types and techniques for detection. The methodology uses a Hidden Markov Model that does not require fraud signatures and can detect anomalies in transactions based on a cardholder's spending habits. Hardware requirements include a computer and software requirements include Windows, WAMP, and Dreamweaver for developing the system.

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    Project Synopsis

    Uploaded by

    Pragya Mittal
    177 views8 pages
    This document summarizes a student project on developing a credit card fraud detection system using machine learning. It discusses the problems of credit card fraud and increasing financial losses. The objectives are to identify different fraud types and techniques for detection. The methodology uses a Hidden Markov Model that does not require fraud signatures and can detect anomalies in transactions based on a cardholder's spending habits. Hardware requirements include a computer and software requirements include Windows, WAMP, and Dreamweaver for developing the system.

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    This is the documentation for credit card fraud detection system usin machine learning.

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    This document summarizes a student project on developing a credit card fraud detection system using machine learning. It discusses the problems of credit card fraud and increasing financial losses. The objectives are to identify different fraud types and techniques for detection. The methodology uses a Hidden Markov Model that does not require fraud signatures and can detect anomalies in transactions based on a cardholder's spending habits. Hardware requirements include a computer and software requirements include Windows, WAMP, and Dreamweaver for developing the system.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    177 views8 pages

    Project Synopsis

    Uploaded by

    Pragya Mittal
    This document summarizes a student project on developing a credit card fraud detection system using machine learning. It discusses the problems of credit card fraud and increasing financial losses. The objectives are to identify different fraud types and techniques for detection. The methodology uses a Hidden Markov Model that does not require fraud signatures and can detect anomalies in transactions based on a cardholder's spending habits. Hardware requirements include a computer and software requirements include Windows, WAMP, and Dreamweaver for developing the system.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 8

    Synopsis

    On

    Credit Card Fraud Detection System


    Submitted in partial fulfillment of the requirements

    For the award of the degree of

    B. Tech
    In

    Computer Science and Engineering


    Submitted by:

    Pragya Mittal

    (1606810229)

    Rajat Kr. Sharma

    (1606810254)

    Rishabh Rastogi

    (1606810262)

    Under the Guidance of

    Mr. Varun Kumar

    Department of Computer Science and Engineering


    Meerut Institute of Engineering and Technology, Meerut
    CREDIT CARD FRAUD DETECTION
    SYSTEM
    (A Complete Project In Machine Learning)
    PROBLEM STATEMENT:
    Credit card fraud stands as major problem for word wide financial institutions. Annual lost due
    to it scales to billions of dollars. We can observe this from many financial reports. Such as 10th
    annual online fraud report by CyberSource shows that estimated loss due to online fraud is $4
    billion for 2008 which is 11% increase than $3.6 billion loss in 2007 and in 2006, fraud in United
    Kingdom alone was estimated to be £535 million in 2007 and now costing around 13.9 billion a
    year. From 2006 to 2008, UK alone has lost £427.0 million to £609.90 million due to credit and
    debit card fraud. Although, there is some decrease in such losses after implementation of
    detection and prevention systems by government and bank, card-not-present fraud losses are
    increasing at higher rate due to online transactions. Worst thing is it is still increasing un-
    protective and un-detective way.

    Over the year, government and banks have implemented some steps to subdue these frauds but
    along with the evolution of fraud detection and control methods, perpetrators are also evolving
    their methods and practices to avoid detection. Thus an effective and innovative methods need to
    be develop which will evolve accordingly to the need.

    REASON BEHIND CHOOSING THIS TOPIC:

    The main aims behind choosing this topic are:

    1. I can apply all my machine learning and web development knowledge into this project.

    2. I think no one might have thought about this project from machine learning point of view.
    Generally, people use magnetic strip detector to check for a fraud credit card.

    3. It is a big project at this point of time.

    OBJECTIVE AND SCOPE:

    Fraud is one of the major ethical issues in the credit card industry. The main aims are, firstly, to
    identify the different types of credit card fraud, and, secondly, to review alternative techniques
    that have been used in fraud detection. The sub-aim is to present, compare and analyze recently
    published findings in credit card fraud detection. This article defines common terms in credit
    card fraud and highlights key statistics and figures in this field. Depending on the type of fraud
    faced by banks or credit card companies, various measures can be adopted and implemented. The
    proposals made in this paper are likely to have beneficial attributes in terms of cost savings and
    time efficiency. The significance of the application of the techniques reviewed here is in the
    minimization of credit card fraud. Yet there are still ethical issues when genuine credit card
    customers are misclassified as fraudulent.

    METHODOLOGY:

    In proposed system, we present a Hidden Markov Model (HMM).Which does not require fraud
    signatures and yet is able to detect frauds by considering a cardholder’s spending habit. Card
    transaction processing sequence by the stochastic process of an HMM. The details of items
    purchased in Individual transactions are usually not known to any Fraud Detection
    System(FDS) running at the bank that issues credit cards to the cardholders. Hence, we feel that
    HMM is an ideal choice for addressing this problem. Another important advantage of the HMM-
    based approach is a drastic reduction in the number of False Positives transactions identified as
    malicious by an FDS although they are actually genuine. An FDS runs at a credit card issuing
    bank. Each incoming transaction is submitted to the FDS for verification. FDS receives the card
    details and the value of purchase to verify, whether the transaction is genuine or not. The types
    of goods that are bought in that transaction are not known to the FDS. It tries to find any
    anomaly in the transaction based on the spending profile of the cardholder, shipping address, and
    billing address, etc. If the FDS confirms the transaction to be of fraud, it raises an alarm, and the
    issuing bank declines the transaction.

    Fig. 1: LEVEL 0 DFD


    FIG. 2: LEVEL 1 DFD
    FIG. 3: ER DIAGRAM
    HARDWARE REQUIREMENT:

     Pentium core 2 duo processor or above


     1 GB RAM
     20 GB HDD
     Router for Internet connection

    SOFTWARE REQUIREMENT:

     Windows Operating System


     WAMP
     Macromedia Dreamweaver

    PROGRAMMING LANGUAGE:

    Python

    REFERENCE / BIBLIOGRAPHY

     The main source of information is a website named “Research Gate” from where I read
    many research papers regarding my project.
     In addition to that, I also studied the matter from wikipedia, the free encyclopedia

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