International Journal of Computer Trends and Technology- volume4Issue2- 2013

Multi-Secure Approach for Credit Card Application Validation

K. Vidhya (1), P. Dinesh Kumar (2)
(1) M.Tech student in Computer Science and Engineering Dr.M.G.R Educational and Research Institute Chennai, Tamilnadu, INDIA

Assistant Professor in Computer Science and Engineering Dr.M.G.R Educational and Research Institute Chennai, Tamilnadu, INDIA Abstract Identity crime has emerged as a serious problem for credit card customers and banks. Fraudsters steal customers identity and obtain credit cards. This poses a major threat to the customers and banks. It leads to the level of deciding the economy of the country. This paper provides an approach in identifying fraudsters at the time of application submission by invoking external services by reducing manual involvement. It is proposed to develop three additional validations by using services of external databases. The credit card application undergoes validations at the time of submission before issuing the card. Keywords Communal Detection, Credit card, Identity crime, Spike Detection, Whitelist

(2)

Identity crime is difficult and expensive to handle in countries that do not issue national identification number to their citizens. Customers fill the credit application form online or using manual paper based work. When online forms are not closed properly, or when the paper forms are not filed or discarded safely, it becomes easy for the fraudsters to misuse the customer information. It leads to the level of deciding the economy of the country. According to Javelin Data Snack, in 2012, 28% of fraud victims reported having their SSN stolen. [6] II. RELATED WORK

I.

INTRODUCTION Javelin identity fraud survey report [6] defines identity theft refers to a fraud committed or attempted using the identifying information of another person without lawful authority. Identity Fraud refers to the actual misuse of the information for monetary gain and activities include, withdrawing money from bank account, applying for a loan and obtain other benefits. Many identity thefts occur through methods such as stolen and frauds in which the person is known to the victim and has access to victims bank statements or other legal statements. Comparative study on accuracy of personalized and aggregated models was proposed by Mohammed et al. [2]. Methods and Identity fraud and Categories of Payment card fraud have been summarized in [3]. User authentication is the process of verifying whether the identity of a user is genuine prior to granting him access to the services in a secured environment. Traditionally when the credit card form is submitted online, it is difficult to identify the applicants real identity. Two data mining based layers are added to help improve to detect fraudulent applications. The layers are Communal Detection (CD) and Spike Detection (SD) [1]. CD and SD layers are unsupervised algorithms that use known frauds for evaluation purposes only.

Identity crime, also called Identity fraud or Identity theft is a theft of existing identity with or without consent, and in case of individuals living or deceased. Misuse of a valid identity, contributes to more than half of the Identity Crime. Once the fraudster gains access to the information, they use the identities for a wide range of unlawful activities. Some of the common activities include accessing credit card information and draw money from the bank, apply for loan, and obtain benefits, services from government. Identity crime can be committed using a wide range of techniques. It has become prevalent with easy access to confidential data through internet or unsecured mailboxes. It is difficult to establish ones real identity for online transactions rather than face-toface transactions, hence making frauds easier. Identity crime causes direct or indirect financial losses for victims including loss of savings, loan or credit card incurred in the victims name. Identity crime harms a victims privacy and sense of individuality. It can cause stress and victims may also feel unsafe. Victims can be convicted of crimes they did not commit causing damage to their reputation and impacting their credit reports with negative information. This negative information could lead to denial of loans to the victims later. Victims need to spend a fairly good amount of time and effort to restore their reputation. Identity crime leads to other crimes.

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International Journal of Computer Trends and Technology- volume4Issue2- 2013

In this method, it is necessary to describe a stream of applications. The stream could either be a long term stream or a short term stream. Applications are compared against each other to find communal relationships. A fixed set of attributes are compared against each other and whitelist is created. The whitelist is a list of communal or self relationship between applications. These relationships reflect bonding between family members and casual acquaintances [1].The other layer is spike detection method that finds the spikes among applications and increases the suspicion score. CD Algorithm Step 1: Every application value is compared against a list of previous application values to find the links Step 2: Every applications link is matched against the whitelist to find communal relationships among applications and reduce their Link score Step 3: Every previous applications score is to be included into the current applications score. Previous score acts as a baseline level. Step 4: Calculate every current application score using link and previous applications score. Step 5: The algorithm updates one random parameters value such that there is a tradeoff between effectiveness with efficiency, or vice versa. Step 6: A new whitelist is constructed on the current Minidiscrete stream links CD algorithm is used to find the relationship among applications. If a score greater than 100 is assigned to an application during comparison, SD algorithm is used to identify the spikes. Spikes are calculated based on a variable set of attributes. SD Algorithm Step 1: Every application value is compared against a list of previous application values step by step Step 2: Calculate applications current value score by integrating the steps to find the spikes. Step 3: Calculate applications score using attribute weights. Step 4: Identify the key attributes to calculate the SD suspicion score. Step 5: The final step updates the weights of the attributes III. METHODOLOGY In this paper, in addition to comparing the applications within the bank database to find the communal relationship and spikes, the applications are also compared against external databases. The services of external databases are used and the service implementations are not changed. Service Oriented Architecture is a process of using services of businesses that are external to the system. Passport database is the first external database against which the application form is validated. Passport is the main identification document in most countries. It is being used by private businesses as well government entities to identify people. The passport should be in a valid status. Identifying attributes like name, date of birth and gender in the application have each been assigned a lower score of 10. When these attributes match with the data in the passport database, a score of 30 is assigned to the application form and further verified against other databases. If the data does not match, each mismatched identifying attributes score is raised to 100 resulting in a higher score being assigned to indicate the conflict in the information. If date of birth information conflicts in the application and passport, the score assigned to the application is 120. Driver License database is the second external database to validate the application form against. Driving license is an official document that states a person may operate a motorized vehicle. The key attributes are compared against the License database. Each attribute has a score of 10. When the application data matches against the License database, a max score of 30 is assigned. Any conflict in the identifying attributes raises the application score by 100 for each mismatched attribute. National Identification number database is the final database to compare the data in the application form. Social Security Number (SSN) is one of the national identification numbers. It is widely used by the government offices to manage records, identify employees etc. Application forms from customers who belong to a country that does not provide national ID is not validated against the third database. A problem in using external databases may have some data quality issues but it is beyond the scope of this paper to present any solution. It is assumed that the external databases have accurate information.

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International Journal of Computer Trends and Technology- volume4Issue2- 2013

Fig 1. System Architecture

ALGORITHM Step 1: Consider the list of applications Step 2: Every application is compared with previous window of application for key attribute fields like passport number, Driver License Number and National ID Step 3: Each attribute is assigned a minimum score of 10 Step 4: If any of the key attributes mismatch, a score of 100 is assigned to each attribute and the application is not approved requesting further evaluation. Step 5: If the score assigned is less than 100, it is further verified against external databases. Step 6: Application form is verified against passport database based on key attribute value passport number to ensure the validity of the application information. Step 7: The applicant identifying attributes like name, date of birth, gender should match with the data in the external database, each matched attribute is assigned a score of 10 and mismatched attribute is assigned a score of 100 Step 8: The above steps are repeated against Driver License database, National Identification Number database Step 9: If the final score of the application form is less than 100, the applicant is valid and the application form is approved; otherwise it is rejected. IV. EXPERIMENTAL RESULTS Identity crime can be found in most databases that contains information about employees, customers, vendors etc. To reduce the crime, key attributes like Passport number, Driver license number, National Identification number are used. The next most important set of attributes that take priority in identifying an applicant are Name, Date of Birth, Gender. Finally, the transient attributes like phone and address. Transient attributes are attributes that change over time.

TABLE I. SAMPLE OF SIX CREDIT APPLICATIONS WITH FIVE ATTRIBUTES

N First o Name 1 Sara 2 3 4 5 6 John John Richard Paul Ann

Last Name Claus Watson Western Cann Muller Watson

Date of Birth 05/07/1965 06/03/1970 08/08/1975 01/10/1982 09/04/1986 06/03/1970

Gender Female Male Male Male Male Female

Passport Number C1234567 F2126789 B2132211 R5436715 N3544545 C5675673

When the application is filled online, it is compared against each application in the sliding window to find if there is a communal relationship between applicants. Applicant 6 and 1 may be twins as they share the same last name, date of birth. Once the applications are compared against each other in the bank database, the application is compared against the passport database, an external database as in Table 2.

TABLE II. SAMPLE PASSPORT DATABASE

Passport No R5436715

First Name Richard Paul J Anne

Last Name Cann Muller Watson

Date of Birth 01/10/1982 09/04/1986 06/03/1971

Gender Male Male Female

In order to maintain confidentiality of the data used, some N3544545 of the fields were encrypted and data were replaced for some C5675673 key attributes. Table 1: represents sample data for 6 applicants. In addition to finding the communal relationship among applications, the applications are compared against external database. For example, the key attributes like first name, date of birth, gender, Passport Number of the applicant are matched against the passport database with passport number as the key. If there are any discrepancies, higher score is assigned, indicating a higher rate of suspicion or fraudsters. The problem with this methodology is gaining access to the external databases and establishing the link between the internal and external databases, but it is beyond the scope of the paper to present the solution.

Table 3 lists the application form along with the score assigned and status. Application 4 is assigned a score of 30(10 for each identifying attribute like first name, date of birth, gender) as they match exactly against the passport database. For application 5, there is a mismatch in First name column and a score of 100 is assigned to this column, date of birth and gender have a score of 10 each totaling to 120. Application form is rejected when the score is greater than 100 indicating a discrepancy or a suspicious activity. Application 6 has a mismatch in 2 key attributes with the assigned score being 210 and form is rejected. The approved forms are validated further against the other two external databases namely the Driver License database and National ID database.

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International Journal of Computer Trends and Technology- volume4Issue2- 2013

TABLE III. THREE CREDIT APPLICATIONS WITH CALCULATED SCORE AND STATUS

N o 4 5 6

First Name Richar d Paul Ann

Date of Birth 01/10/198 2 09/04/198 6 06/03/197 0

Gende r Male Male Female

Passport No R5436715 N354454 5 C5675673

Sco re 30 120 210

Status Approve d Rejected Rejected

V. CONCLUSION In this paper we have proposed a method to evaluate credit card application form against external databases at the time of submission. This method provides a way to prevent fraudsters from receiving credit cards, rather than finding way to detect fraudster after the card has been issued.

REFERENCES [1] Phua, C; Smith-Miles, K. ; Lee, V. ; Gayler, R. Resilient Identity Crime Detection IEEE Transactions on Knowledge and Data Engineering, pp: 533 546 Mar12, [2] Mohammed Ibrahim Alowais; Lay-Ki Soon Credit Card Fraud Detection: Personalized or Aggregated Model 2012 Third FTRA International Conference on Mobile, Ubiquitous, and Intelligent Computing, pp 114-119 [3] Irina Sakharova, Payment card fraud: Challenges and solutionspp 227-234 [4] Handbook on Identity-related Crime, United Nations Office on drugs and Crime [5] Gary R. Gordon, Donald J. Rebovich, Kyung- Seok Choo, Judith B. Gordon, Identity Fraud Trends and Patterns: Building a Data- Based Foundation for Foundation for Proactive Enforcement,Center for Identity Management and Information Protection, Utica College, October 2007. [6] How Consumers can protect against Identity Fraudsters in 2013: Consumer Version. Javelin Strategy & Research

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