Fraud Detection That Accounts for Misclassification Using Cost-Sensitive Logistic Regression

Fraud detection is a cost-sensitive problem, in the sense that falsely flagging a transaction as fraudulent carriesa significantly different financial cost than missing an actual fraudulent transaction. In order to take these costs into account, companies should use a more business-oriented measure such as “Cost,” which allows companies to make decisions that are better aligned... Continue Reading →

Evaluating a Fraud Detection Using Cost-Sensitive Predictive Analytics

A credit card fraud detection algorithm consists in identifying those transactions with a high probability of being fraudulent based on historical fraud patterns. The use of predictive modeling/machine learning in fraud detection has been a topic of interest in recent years. Different detection systems based on machine learning techniques have been successfully used for this problem,... Continue Reading →

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