What is Special About Credit Card Fraud Detection Using Machine Learning

From the time when online payment came into existence fraudsters found ways to put fingers and swipe money away from your credit cards. Sometimes it’s due to a lack of technical knowledge or even due to the fact that the scammers are getting smarter and finding out new ways to get their things done. In the pandemic, as more and more people are opting for online payment for safety and convenience the problem is getting bigger.

Credit card fraud news is more frequent than before now. Organizations, consumers, banks, and merchants are at constant risk of data breaching and monetary threats. Not to mention it also takes away all the rapport that organizations gathered over the years. When we are in the era where AI and Machine learning in solving each problem why not try to solve this as well? here we need Credit Card Fraud Detection Using Machine Learning algorithms to solve this problem.

According to RBI Fraudsters siphoned off Rs 615.39 crore in more than 1.17 lakh cases of credit and debit card frauds over 10 years (April 2009 to September 2019). Let’s See how Credit Card Fraud Detection Using Machine Learning algorithms can tackle this problem.

How does credit card fraud takes place?

More often than not credit card fraud is caused by a lack of technical knowledge of the credit card owner here are some examples of how it can happen

• When the owner reveals the number in front of his friends family or relative
• When someone calls them claiming to be some officials asking for a fine or some kind of charge to fix something
• If the card is stolen physically
• If the card scanning machine has some kind of copying device embedded in it, this will have the real account info as the real one
• When you give your credit card details to some suspicious unknown website they can also copy this

Fake credit cards look quite legit and also have a magnetic strip attached to it. The scammer destroys it after the payment is successful to avoid getting caught. The real owner would not even notice before money is deducted from their account and its already too late. Let’s see how Credit Card Fraud Detection Using Machine Learning algorithms can help you.

How Credit Card Fraud Detection using machine learning is done?

As the name suggests its way of “Fraud detection” is a set of activities that are taken to prevent money or property from being obtained through false pretenses.” Not a hard concept to understand but how is Credit Card Fraud Detection Using Machine Learning algorithms is actually one in real life, out of textbook language? let’s find out.

There are many ways to commit fraud in money online money transfer. There are also various methods of Credit Card Fraud Detection Using Machine Learning algorithms. It can be with the help of a fraud detecting dataset, it is used as a reference to verify what is valid payment and what was not and a probable fraud is being committed there. This decision must consider IP address, geolocation, device identification, “BIN” data, global latitude/longitude, historic transaction patterns, and the actual transaction information.

This means the dataset stored in the server coupled with a dataset of previous transactions of the card user will be used by algorithms to find out if the current payment request will be considered fraud or not. Here all the data are collected such as Date, User Zone, Product Category, Amount, Provider, Client’s Behavioral Patterns, etc. The Ai model is trained through patterns to find what is fraud and what is not.

How machine learning can help with a clone/fake credit card?

Here the scammer duplicates the card by putting a copying device in the card swiping machine at local stores or even at a remote ATM machine. This copying device is illegally fitted into the scanners by some dishonest worker in that store. This is more popular than any other method. The conventional method of comparing the information with referencing the dataset in the server does not work well with this method.

Here If we put Credit Card Fraud Detection Using Machine Learning algorithms into use to learn from the enormous amount of data set and decide what is normal error happened by the credit card owner and what is a fraud.

How Machine Learning can prevent from account getting stolen?

Yes, it sounds scary and it actually is. How can this happen? It is possible is the scammer can get their hands on its victim’s personal details like If you are n India your Adhar Details similar to social security number to US phone number name on the credit card number, or even the answers to security questions. It’s called stealing identity. From here they can use your bank account and swipe away your hard-earned money in no time.

Here a machine learning algorithm that learns each user’s behavior and detects when the user or scammer on his behalf is acting suspiciously it can double-check like sending OTP can fix the problem. Though it’s quite hard to build it will be worth the hassle.

For example, if there is a break in regularity of his payments if someone spends some amount in an area its quite regular behavior when the transaction location comes across another part of the country with exceeding the previous amount the Credit Card Fraud Detection Using Machine Learning algorithms will consider this as a probable fake transaction and the algorithm will sent verification code or OTP to verify its really you the owner.

Fake application for new Cards, How does machine learning can help?

It is also initiated by account theft but what the thief does differently is they apply for a new credit card from the victim’s name, As they have stolen your identity documents already they don’t face a hard time tackling the verification process.

How machine learning can help?

Here is also similarly Credit Card Fraud Detection Using Machine Learning algorithm will detect the anomaly and helps to identify whether a transaction has any unusual patterns, such as date and time or the number of goods. If the algorithm spots such unusual behavior, the owner of the bank account will be protected by a few verification methods.

How can machine learning help if someone tries to completely take over account?

This is how it happens, The scammers sent Emails to the cardholders pretending to be bank managers. This email surely looks legit. It will have the same logo and almost the same URL, so much so that you won’t notice anything wrong unless you look closely carefully. What obviously most of the people don’t do.

If you provide them the information from here or click any link given in that email or even open that email. They will know your personal information such as bank details and passwords. Probably you know what will happen next, a real message will come now from the bank that now you have close to zero money in your bank account.

Credit Card Fraud Detection Using Machine Learning algorithms can again work in a similar way and recognize the pattern of spending habits and detect suspicious-looking patterns for fraud detection.

How Credit Card Fraud Detection Using Machine Learning is implemented?

The users can be smart from their end but in order to stop credit card fraud, we have to do something where it happens the most, the e-Commerce platforms. Credit Card Fraud Detection Using Machine Learning algorithms module is installed it records the transactions habits and the location of the user when something goes suspicious it shows an alert and works according to how its programmed.

• 10 percent fraud probability is ignored
• If the probability is from 10 to 80 another verification factors come into action
• if it’s more than 80 then the account gets frozen

Top 3 things Credit Card Fraud Detection Using Machine Learning model needs to be trained properly

• Firstly Credit Card Fraud Detection Using Machine Learning algorithms will need loads of data of both real and fake transactions to compare and detect.
• The amount of data is not enough it should be quality data which means it completely random else it will be affected by AI biases
• The data should be unbiased

Top 3 advantages of implementing Credit Card Fraud Detection Using Machine Learning

• It will provide more safety to the user so they won’t be afraid to use your service
• If we can reduce frauds all together from the society it will become a great market place for more business
• It will also provide an extra level of security on your end too in order to keep your account safe.

Conclusion

Scammers have had their way for so long but not anymore. Now we have the power of AI and Machine Learning to take care of it. No, this time they will find their way out. In order to stop criminal actions, we must do this. Not just to keep their hard-earned money safe but also to save our business reputation. Now if you want to know more about Credit Card Fraud Detection Using Machine Learning algorithms and are interested to have one for yourself feel free to as our Artificial Intelligence and Machine Learning Team to help you out without query for free thank you for spending time with us have a great day.