341_Credit Card Fraud_300153396

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Credit Card Fraud: The Plastic Solution : 

Aarti Patel 300153396 INFO 341 –Semester 2 2009 Assignment 1: Video Presentation Credit Card Fraud: The Plastic Solution The Way Businesses Protect Themselves

Introduction : 

Credit card popularity = Boom in e-commerce Introduction Large share of payment systems = attraction to steal credit card accounts Chances of loosing data due to criminal activity has risen due to growth in ecommerce. Javelin Strategy & Research say credit card fraud is on the rise and identity theft is increasing. Romania’s home-grown hackers “pull off millions of dollars of credit card scams each year”

Introduction : 

Data mining is a method of extracting knowledge from large data sets Introduction Data mining is useful for common crimes. But a scalable method processed efficiently and in a timely manner, is problematic. Organisations developing fraud warning systems for solutions with large scale data mining. Resulting in priority to fraud detection Many solutions , all with varying degrees of success.

1990: 32.5 million credit cards issued by banks : 

(Levi, 1991) 1990: 32.5 million credit cards issued by banks The Cost of Plastic Fraud Table 1: Fraud losses, Major Retail Banks, 1988-1990 700 million credit card transactions 1988: total cost of fraud 97% and plastic fraud 126 % 2004: illegal credit card purchases totalled $788 million

How Can Data Mining Help? : 

Software assists policing agencies to predict where to put patrols. How Can Data Mining Help? Initiated automated security applications. Heightened computer predictive analytics software (SPSS) used to spot credit card fraud Relies on business intelligence and IT capabilities to analyze patterns and trends from unusual spending.

An Industry Example : 

Fair Isaac (FIC) and ID Analytics is looking to software solutions, with high-powered data-mining methods to alert for fraud instances. An Industry Example "Fighting fraud is a full-time job." Transaction aggregation method is situational, many look to FIC to provide a general solution. Software solutions which use high powered data mining techniques MasterCard and Visa fight fraud by spending millions to prevent and identify illegal transactions. “People are clever, and we have to be vigilant to protect our systems"

On a National Scale : 

On a National Scale Homeland Security has developed an Automated Targeting System This assigns risk scores using data and singles out suspected criminals. Policing agencies spend a long time evaluating ‘suspects’ . The method lacks the justification to use it Widespread endorsement would follow ATS if it successfully catches terrorists Two flaws -terrorist attacks are very rare to find patterns -lack of patterns to derive algorithms “Wasting national resources” says Jeff Jonas from the Cato Institute; Systems Research and Development.

Credit Card Fraud: The Plastic Solution : 

Aarti Patel 300153396 Credit Card Fraud: The Plastic Solution The Way Businesses Protect Themselves THANKS FOR WATCHING!!

References : 

Berner, R., Carter, A..(2005, June 21). The Truth about Credit Card Fraud. Business Week Online. New York. Pg. 1. Retrieved September 4, 2009 from http://proquest.umi.com.helicon.vuw.ac.nz/pqdweb?index=18&did=856534391&SrchMode=1&sid=11&Fmt=3&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1249343667&clientId=7511 Chan, P.K., Fan, W., Prodromodis, A.L., Stolfo, S.J. (1999) “Distributed Data Mining in Credit Care Fraud” IEEE Intelligent Systems (14:6), pp 67-74. Retrieved August 4, 2009 from ProQuest Database. DOI: 10.1109/5254.809570 Encyclopeadia.Com. (2009). Visa Reports Strong E-Commerce Growth, Increased Adoption Of Verified by Visa; Fraud Prevention Tool Spurs Consumer Confidence and Merchant Sales in E-Commerce - Business Wire. Retrieved August 25, 2009 from http://www.encyclopedia.com/doc/1G1-118813710.html Harper, J. (2006, December 7). Data mining can’t improve our security. But it does invade our privacy. St. Louis Post. Pg. C.11. Retrieved September 4, 2009 from http://proquest.umi.com.helicon.vuw.ac.nz/pqdweb?did=1175729161&sid=11&Fmt=3&clientId=7511&RQT=309&VName=PQD Levi, M. (1991). The Prevention of Cheque and Credit Card Fraud. Crime Prevention Unit Paper no.26. London. Retrieved September 2, 2009 from http://www.crimereduction.homeoffice.gov.uk/toolkits/br10.htm References