Monitoring Sale Transactions for Illegal Activity Richardson Monitoring Sale Transactions for Illegal Activity

Discriminant analysis and neural network methodologies were applied to the problem of identifying illegal sales transactions. The researchers independently developed models using data provided by a cr^it card company. A series of measures were developed and used to construct the models. The final results were that the discriminant analysis model recognized 32.3 % of the fraudulent activity, while the neural network approach found 28.9%. With only 11.6 % of the transactions in common, the combination of the two models identified 49.6%i. In order to provide a real time monitoring program, the models were simplified yielding a capture rate of approximately 42%