Fraud Formalization and Detection

  • Bharat Bhargava
  • Yuhui Zhong
  • Yunhua Lu
Part of the Lecture Notes in Computer Science book series (LNCS, volume 2737)


A fraudster can be an impersonator or a swindler. An impersonator is an illegitimate user who steals resources from the victims by “taking over” their accounts. A swindler is a legitimate user who intentionally harms the system or other users by deception. Previous research efforts in fraud detection concentrate on identifying frauds caused by impersonators. Detecting frauds conducted by swindlers is a challenging issue. We propose an architecture to catch swindlers. It consists of four components: profile-based anomaly detector, state transition analysis, deceiving intention predictor, and decision-making component. Profile-based anomaly detector outputs fraud confidence indicating the possibility of fraud when there is a sharp deviation from usual patterns. State transition analysis provides state description to users when an activity results in entering a dangerous state leading to fraud. Deceiving intention predictor discovers malicious intentions. Three types of deceiving intentions, namely uncovered deceiving intention, trapping intention, and illusive intention, are defined. A deceiving intention prediction algorithm is developed. A user-configurable risk evaluation function is used for decision making. A fraud alarm is raised when the expected risk is greater than the fraud investigation cost.


Satisfaction Rating Legitimate User Fraud Detection Hellinger Distance Access Control Mechanism 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


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Copyright information

© Springer-Verlag Berlin Heidelberg 2003

Authors and Affiliations

  • Bharat Bhargava
    • 1
  • Yuhui Zhong
    • 1
  • Yunhua Lu
    • 1
  1. 1.Center for Education and Research in Information Assurance and Security (CERIAS), and Department of Computer SciencesPurdue UniversityWest LafayetteUSA

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