Employing transaction aggregation strategy to detect credit card fraud

摘要

Credit card fraud costs consumers and the financial industry billions of dollars annually. However, there is a dearth of published literature on credit card fraud detection. In this study we employed transaction aggregation strategy to detect credit card fraud. We aggregated transactions to capture consumer buying behavior prior to each transaction and used these aggregations for model estimation to identify fraudulent transactions. We use real-life data of credit card transactions from an international credit card operation for transaction aggregation and model estimation.