Transaction Fraud Detection Based on Total Order Relation and Behavior Diversity

With the popularization of online shopping, transaction fraud is growing seriously. Therefore, the study on fraud detection is interesting and significant. An important way of detecting fraud is to extract the behavior profiles (BPs) of users based on their historical transaction records, and then to verify if an incoming transaction is a fraud or not in view of their BPs. Markov chain models are popular to represent BPs of users, which is effective for those users whose transaction behaviors are stable relatively. However, with the development and popularization of online shopping, it is more convenient for users to consume via the Internet, which diversifies the transaction behaviors of users. Therefore, Markov chain models are unsuitable for the representation of these behaviors. In this paper, we propose logical graph of BP (LGBP) which is a total order-based model to represent the logical relation of attributes of transaction records. Based on LGBP and users’ transaction records, we can compute a path-based transition probability from an attribute to another one. At the same time, we define an information entropy-based diversity coefficient in order to characterize the diversity of transaction behaviors of a user. In addition, we define a state transition probability matrix to capture temporal features of transactions of a user. Consequently, we can construct a BP for each user and then use it to verify if an incoming transaction is a fraud or not. Our experiments over a real data set illustrate that our method is better than three state-of-the-art ones.

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