Credit Card Fraud Detection Using Hidden Markov Model Project Report

Introduction to Credit Card Fraud Detection Using Hidden Markov Model Project:

Credit card based purchases are of two types they are

1. Physical card
2. Virtual card

Physical card based purchase: The card holder contains a card and in order to purchase a good or make any transaction the card holder should carry the card. 

Virtual card based purchase: Here the card holder need not carry the card, just a few details about the card are enough to carry out the transactions. It is generally done in online shopping.

In physical card based purchase the fraudulent transactions can be done only if the attacker was able to steal the card from cardholder and if the cardholder doesn’t notice the loss of credit card it may lead to financial loss.

At present the fraud is detected after the fraud is done that when the card holder complaints. The online purchases are more so we don’t know how the person is using the card online we just capture IP address for verification. So there an urgent need to investigate about the fraud. Fraud detection based on analysis of existing purchase data of cardholder is a promising way to reduce the rate of successful credit card frauds. As humans tend to exhibit various behavioral profiles, each cardholder can be represented by a set of patterns containing information about typical purchase category, the time since last purchase, amount paid etc. This process is known as HMM Hidden Markov Model. The details of items purchased are not known at FDS running at the bank that issues credit cards to cardholders.

The modules present in this project are as follows

1. New card: The customer provides their contact and personal information to obtain a credit card. They can create their own login and password.
2. Login:  With the valid usernames and passwords the users can visit the website
3. Security information: When the user looses the card security information module arises. In order to move to the transaction section he has to answer a set of questions.
4. Transaction: The credit card owner or authorized person can only make the transactions
5. Verification: In this process the card number is verified to ensure that the  transaction is made by card holder itself.

 Download Credit Card Fraud Detection Using Hidden Markov Model Project Report.