Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
7408813 | International Journal of Forecasting | 2012 | 8 Pages |
Abstract
When proposed new fraud detection systems are tested in revolving credit operations, a straightforward comparison of the observed fraud detection rates is subject to a selectivity bias that tends to favour the existing system. This bias arises from the fact that accounts are terminated when the existing system, but not the proposed new system, detects a fraudulent transaction. This therefore flatters the estimated detection rate of the existing system. We develop more formal estimators that can be used to compare the existing and proposed new systems without risking this effect. We also assess the magnitude of the bias.
Keywords
Related Topics
Social Sciences and Humanities
Business, Management and Accounting
Business and International Management
Authors
David J. Hand, Martin J. Crowder,