Fraud is defined as an act or course of deception, an intentional concealment, omission, or perversion of truth, to gain unlawful or unfair advantage, induce another to part with some valuable item or surrender a legal right, or inflict injury in some manner.Detection is defined as the act of noticing or discovering something, especially something that is not easy to see or hear. Fraud detection thus is the act of discovering deception or concealment to gain unlawful or unfair advantage, or inducing of individuals to part with money or advantage to would be fraudsters.

Fraud is a million dollar business and it is increasing every year. Fraud involves one or more persons who intentionally act secretly to deprive another of something of value, for their own benefit. Fraud is as old as humanity itself and can take an unlimited variety of different forms. However, in recent years, the development of new technologies has also provided further ways in which criminals may commit fraud. In addition, business reengineering, reorganization or downsizing may weaken or eliminate control, while new information systems may present additional opportunities to commit fraud.

 Traditional ways of data analysis have been in use since a long time as a method of detecting fraud. They require complex and time-consuming investigations that deal with different domains of knowledge like financial, economics, business practices and law. Fraud often consists of many instances or incidents involving repeated transgressions using the same method. Fraud instances can be similar in content and appearance but usually are not identical.

 In the technological systems, fraudulent activities have occurred in many areas of daily life such as telecommunication networks, mobile communications, on-line banking, and Ecommerce. Fraud is increasing dramatically with the expansion of modern technology and global communication, resulting in substantial losses to the businesses. Consequentially, fraud detection has become an important issue to be eexplored.

 Fraud detection involves identifying fraud as quickly as possible once it has been perpetrated. Fraud detection methods are continuously developed to defend criminals in adapting to their strategies. The development of new fraud detection methods is made more difficult due to the severe limitation of the exchange of ideas in fraud detection. Data sets are not made available and results are often not disclosed to the public. The fraud cases have to he detected from the available huge data sets such as the logged data and user behaviour. At present, fraud detection has been implemented by a number of methods such as data mining, statistics, and artificial intelligence. Fraud is discovered from anomalies in data and patterns. The objective of fraud detection is to maximize correct predictions and maintain incorrect predictions at an acceptable level.


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