Fraud Detection in Telecommunications: History and Lessons Learned

Fraud detection is an increasingly important and difficult task in today's technological environment. As consumers are putting more of their personal information online and transacting much more business over computers, the potential for losses from fraud is in the billions of dollars, not to m...

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Bibliographic Details
Published in:Technometrics 2010-02, Vol.52 (1), p.20-33
Main Authors: Becker, Richard A., Volinsky, Chris, Wilks, Allan R.
Format: Article
Language:English
Subjects:
Anomaly Detection
Applied sciences
Automated message accounting
Automation
Billing
Business structures
Communities of interest
Computer science
control theory
systems
Computer systems and distributed systems. User interface
Credit card fraud
Credit card industry
Credit cards
Criminal investigations
Data processing. List processing. Character string processing
Data stream
Detection systems
Exact sciences and technology
Fraud
Fraud prevention
Graph matching
Identity theft
Information retrieval. Graph
Internet
Internet fraud
Memory and file management (including protection and security)
Memory organisation. Data processing
Plagiarism
Signatures
Social networks
Software
Telecommunications
Theoretical computing
Top-k
Virtual private networks
Voter fraud
Wire fraud
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Summary:Fraud detection is an increasingly important and difficult task in today's technological environment. As consumers are putting more of their personal information online and transacting much more business over computers, the potential for losses from fraud is in the billions of dollars, not to mention the damage done by identity theft. This paper reviews the history of fraud detection at AT&T, one of the first companies to address fraud in a systematic way to protect its revenue stream. We discuss some of the major fraud schemes and the techniques used to address them, leading to generic conclusions about fraud detection. Specifically, we advocate the use of simple, understandable models, heavy use of visualization, and a flexible environment and emphasize the importance of data management and the need to keep humans in the loop.
ISSN:0040-1706
1537-2723
DOI:10.1198/TECH.2009.08136