. One method for detecting fraud is to check for suspicious changes in user behavior. This paper describes the automatic design of user profiling methods for the purpose of fraud detection, using a series of data mining techniques. Specifically, we use a rule-learning program to uncover indicators of fraudulent behavior from a large database of customer transactions. Then the indicators are used to create a set of monitors, which profile legitimate customer behavior and indicate anomalies. Finally, the outputs of the monitors are used as features in a system that learns to combine evidence to generate high-confidence alarms. The system has been applied to the problem of detecting cellular cloning fraud based on a database of call records. Experiments indicate that this automatic approach performs better than hand-crafted methods for detecting fraud. Furthermore, this approach can adapt to the changing conditions typical of fraud detection environments. Keywords: fraud detection, rule l...

We introduce a problem class which we term activity monitoring. Such problems involve monitoring the behavior of a large population of entities for interesting events requiring action. We present a framework within which each of the individual problems has a natural expression, as well as a methodology for evaluating performance of activity monitoring techniques. We show that two superficially different tasks, news story monitoring and intrusion detection, can be expressed naturally within the framework, and show that key differences in solution methods can be compared. 1 Introduction In this paper we introduce a problem class which we term activity monitoring. Such problems typically involve monitoring the behavior of a large population of entities for interesting events requiring action. Examples include the tasks of fraud detection, computer intrusion detection, network performance monitoring, crisis monitoring, some forms of fault detection, and news story monitoring. These appli...

Abstract. One method for detecting fraud is to check for suspicious changes in user behavior. This paper describes the automatic design of user profiling methods for the purpose of fraud detection, using a series of data mining techniques. Specifically, we use a rule-learning program to uncover indicators of fraudulent behavior from a large database of customer transactions. Then the indicators are used to create a set of monitors, which profile legitimate customer behavior and indicate anomalies. Finally, the outputs of the monitors are used as features in a system that learns to combine evidence to generate high-confidence alarms. The system has been applied to the problem of detecting cellular cloning fraud based on a database of call records. Experiments indicate that this automatic approach performs better than hand-crafted methods for detecting fraud. Furthermore, this approach can adapt to the changing conditions typical of fraud detection environments.