Chapter 14: Techniques for Detecting Fraud: Synthetic Credit Card Transaction Dataset

Published: 10 November 2023| Version 1 | DOI: 10.17632/wydfx7yhcx.1


synthetic credit card transaction data. You will scrutinize this data to flag transactions that stand out as potential anomalies. A real-world dataset of credit card transactions, which includes indices and amounts, is the basis for this exercise. Due to privacy considerations, an actual dataset isn't available; instead, a synthetic or anonymized dataset will be used for demonstration.


Steps to reproduce

To perform univariate anomaly detection in credit card transactions using Tukey’s Fences method, you would follow these general steps, ideally in a Python environment using libraries like pandas and matplotlib for data manipulation and visualization: Step 1: Prepare the Environment: Set up your Python environment, ensuring you have the necessary libraries installed. Step 2: Load the Dataset: Import the synthetic credit card transaction dataset. In practice, this would be a CSV or an Excel file. Here we're assuming a CSV file. Step 3: Conduct the Analysis with Tukey’s Fences: - Calculate the first and third quartiles (Q1 and Q3), and the interquartile range (IQR). - Define the bounds for potential anomalies. Transactions that fall below Q1 - 1.5 * IQR or above Q3 + 1.5 * IQR could be considered anomalies. - Identify the anomalies by filtering the transactions that fall outside of these bounds. Step 4: Visualize the Results: Create a scatter plot visualizing normal transactions and anomalies. Step 5: Reflect and Apply Insights: After identifying anomalies, you'd document your findings, consider the context of each anomaly, and decide whether it requires further investigation. Step 6: Translate Findings: Reflect on the methodology used and consider how it can be applied to other fraud detection scenarios. Step 7: Modify the Analysis: You can adjust the IQR multiplier to be more or less sensitive. For example, using 2.5 * IQR or 3 * IQR instead of 1.5 * IQR can help you tune the sensitivity. Remember to replace 'path_to_file.csv' with the actual path to your dataset file. If you encounter any errors or need more specific guidance on any of these steps, feel free to ask for more detailed instructions.


Fraud, Credit Card Fraud