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CRedit Card Fraud Detection System

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24 views9 pages

CRedit Card Fraud Detection System

Uploaded by

Kushagra Juyal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Doon International School

City Campus Dehradun

ARTIFICIAL INTELLIGENCE
Portfolio Project Report
ON

_______________________________________________

Submitted To Submitted By
Acknowledgement

I would like to express my sincere gratitude to all these individuals for mentoring and
supporting me in completing this project …………………. [Project name]

My teacher …………… [Teacher’s Name], for providing me with invaluable insights and
direction.

Our esteemed principal …………….. [Principal’s Name], for fostering an environment of


learning and creativity within our school.

To my parents, their constant encouragement, patience, and understanding have been


the pillars of my success.

I am grateful to my friends who contributed ideas and perspectives that enriched the
project.

Thank you everyone for shaping this project and enhancing my learning experience.
Index

S.No. Content Page No Remarks


Certificate

This is to certify that _________________(name of student) of


__________ (class) has successfully completed the Artificial
Intelligence project on the _____________________________
(topic) under the guidance of_______________________ (subject
teacher) for the academic session 2024-25.

___________
(Teacher Name)
Introduction
Credit card fraud detection is the process of identifying and preventing
unauthorised and fraudulent use of debit and credit cards. Credit card fraud is a primary
concern for banks, who work hard to stay ahead of scammers and cybercriminals, both
big and small. In the past, credit card fraud was simpler to detect as it mainly
involved thieves stealing credit cards and using them at ATMs or retail outlets to make
unauthorised transactions. However, with the rise of electronic commerce, fraud has
become more complex and sophisticated.

To prevent fraud, banks must constantly update their payment-transaction systems and
plug vulnerabilities to ensure the purchaser is a legitimate cardholder. They also use
digital tools and continuously adapt their fraud detection systems to learn from new data
and evolving techniques.

Credit card fraud detection involves various tools to verify transactions, techniques to
authenticate cardholders and technologies, such as statistical analysis and machine
learning, to monitor suspicious transactions and activities. Much of the fraud detection
process happens behind the scenes through systems used by credit card companies,
including card networks and providers.

The challenge is to recognize fraudulent credit card transactions so that the customers
of credit card companies are not charged for items that they did not purchase.

Main challenges involved in credit card fraud detection are:


1. Enormous Data is processed every day and the model build must be fast
enough to respond to the scam in time.
2. Imbalanced Data i.e most of the transactions (99.8%) are not fraudulent
which makes it really hard for detecting the fraudulent ones
3. Data availability as the data is mostly private.
4. Misclassified Data can be another major issue, as not every fraudulent
transaction is caught and reported.
5. Adaptive techniques used against the model by the scammers.
How to tackle these challenges?
1. The model used must be simple and fast enough to detect the anomaly and
classify it as a fraudulent transaction as quickly as possible.
2. Imbalance can be dealt with by properly using some methods which we will
talk about in the next paragraph
3. For protecting the privacy of the user the dimensionality of the data can be
reduced.
4. A more trustworthy source must be taken which double-check the data, at
least for training the model.
5. We can make the model simple and interpretable so that when the scammer
adapts to it with just some tweaks, we can have a new model up and running
to deploy.
Problem scoping
Modelling
It is not a hidden fact that we live in the digital era, which means everything is done online.
This includes money management and the whole e-commerce area. So, the credit card
fraud is often a problem that results in the loss of many important things. This problem
can be prevented by using machine learning algorithms.

Classification Algorithm
Classification is a type of supervised learning approach where the goal is to predict the
category or class of an instance that are based on its features. In classification it involves
training model on a dataset that have instances or observations that are already labelled
with Classes and then using that model to classify new, and unsee n instances into one
of the predefined categories.

Random forest is an ensemble learning techniques that combines multiple decision


trees to improve predictive accuracy and control over-fitting. By aggregating the
predictions of numerous trees, Random Forests enhance the decision-making process,
making them robust against noise and bias.
Random Forest uses numerous decision trees to increase prediction accuracy and
reduce overfitting. It constructs many trees and integrates their predictions to create a
reliable model. Diversity is added by using a random dataset and characteristics in each
tree. Random Forests excel at high-dimensional data, feature importance metrics, and
overfitting resistance. Many fields use them for classification and regression.

Rain forest
Conclusion

Bibliography
1. https://www.geeksforgeeks.org/ml-credit-card-fraud-detection/?ref=lbp
2. https://www.geeksforgeeks.org/top-6-machine-learning-algorithms-for-
classification/
3. https://www.nerdwallet.com/au/credit-cards/credit-card-fraud-detection

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