DEVELOPMENT AND IMPLEMENTATION OF A DEBIT CARD FRAUD DETENTION SYSTEM

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DEVELOPMENT AND IMPLEMENTATION OF A DEBIT CARD FRAUD DETENTION SYSTEM

 

ABSTRACT

All over the world, the most accepted payment mode is via Debit card for both online and offline payments in today’s world, it helps implement the cashless policy for shopping at every shop across the country. It is the most convenient method to do shopping on the internet, and also for paying utilitybills etc. Hence, increasing the risks of Debit card fraud transaction. In the existing manual Debit card fraud detection business processing system, fraudulent transaction will be detected after transaction is done. It has become very difficult to find out fraudulent and regarding loses will be barred by issuing authorities. In this research, the researcher has proposed to design and implement a Debit card fraud detention system developed using HTML, CSS and PHP.

 

  

 

 

 

 

 

 

CHAPTER ONE/INTRODUCTION 

 

  • BACKGROUND OF THE STUDY

 

In our day to day life, online transactions are increased to purchase goods and services. According to Nielsen study conducted in 2007-2008, 28 of the world’s total population has been using internet.85 of these people has used internet to make online shopping and the rate of making online purchasing has increased by 40 from 2005 to 2008.The most common method of payment for online purchase is Debit card .In developed countries and also in developing countries to some extent ,Debit card is most acceptable payment mode for online and offline transaction. It can give financial loses to issuing authorities .In the second method purchasing i.e.

Online, these transactions generally happen on telephone or internet and to make this kind of transaction, the user will need some important information about a Debit card (such as Debit card number, validity, CVV number, name of card holder).

In our daily lives, Debit cards are used for purchasing goods and services with the help of virtual card for online transaction or physical card for offline transaction. In a physical-card based purchase, the cardholder presents his card physically to a merchant for making a payment. To carry out fraudulent transactions in this kind of purchase, an attacker has to steal the Debit card. If the cardholder does not realize the loss of card, it can lead to a substantial financial loss to the Debit card company. In online payment mode, attackers need only little information for doing fraudulent transaction (secure code, card number, expiration date etc.). In this purchase method, mainly transactions will be done through Internet or telephone. To commit fraud in these types of purchases, a fraudster simply needs to know the card details. Most of the time, the genuine cardholder is not aware that someone else has seen or stolen his card information. The only way to detect this kind of fraud is to analyze the spending patterns on every card and to figure out any inconsistency with respect to the “usual” spending patterns. Fraud detection based on the analysis of existing purchase data of cardholder is a promising way to reduce the rate of successful Debit card frauds. Since humans tend to exhibit specific behaviorist profiles, everyCard holder can be represented by a set of patterns containing information about the typical purchase category, the time since the last purchase, the amount of money spent, etc.

Deviation from such patterns is a potential threat to the system

  • STATEMENT OF THE PROBLEM

It has already been mentioned that the losses of a Debit card fraud can affect all consumers, merchants and issuing banks. Therefore, it is important to establish techniques for detecting and preventing Debit card fraud. This research contains a variety of techniques which can be used to build fraud detection systems. Understanding the characteristics of all those techniques can be a tedious task. A technique which promises a high predictive accuracy may be an appealing candidate to be used in the fraud detection system. However, there are various different parameters that need to be considered before deciding which technique best suits the needs of a particular situation.And also as all the transaction is maintained in a log. And also now a day’s lot of online purchase are made so we don’t know the person how is using the card online, we just capture the IP address for verification purpose. So there is a need to develop a system to fight cyber-crime and to aid ininvestigating the fraud. To avoid the entire above disadvantage we propose the system to detect the fraud in a best and easy way.

  • AIMS AND OBJECTIVE OF THE STUDY

This research aims at the Design and Implementation of a Debit card fraud detention system to prevent Debit card fraud.

The following are the objectives of the study:

  1. Develop a system to keep record of every fraudulent Debit card transaction online.
  2. A system to easily detect a stolen Debit card.
  3. To easily track and report fraudulent transactions to relevant agency.

 

  • SCOPE OF THE STUDY

The scope of the research is focused on implementing a Debit card fraud detention system to compact the increasing cyber-crimes faced by our country.

 

  • DEFINITION OF TERMS

  • Debit Card – A Debitcard is a thin rectangular slab of plastic issued by a financial company, that lets cardholders borrow funds with which to pay for goods and services.
  • Fraudulent – Obtained, done by, or involving deception, especially criminal deception.
  • Verification –The process of establishing the truth, accuracy, or validity of something.
  • Consumer- A person who purchases goods and services for personal use.
  • Transaction- An instance of buying or selling something.
  • Purchase- Acquire (something) by paying for it; buy.

 

 

 

 

 

 

 

 

 

 

 

 

CHAPTER TWO

LITERATURE REVIEW

This chapter details the information found in the literature. It starts with a reference to the different fraud types of Debit industry. Then a discussion on the existing techniques for detecting and preventing Debit fraud is made. There is also a brief discussion on the technologies which were used during this project. Finally, other fraud types and crimes are discussed.

2.1 Debit Fraud

There are three main types of Debit fraud in the literature. These are Debit card fraud, bankruptcy fraud and Debit application fraud. A detailed explanation of each fraud type follows.

2.1.1 Debit Card Fraud

This is the most common fraud type that occurs in Debit industry. A fraudster uses a legitimate card to undertake illegitimate transactions. The cardholder is not aware of the fact that their card is being used without their permission. The fraudster takes advantage of cardholder’s ignorance by undertaking as much transactions as possible before the cardholder realizes and reports the fraud to their bank.

According to Laleh et al. (2009) Debit card fraud can be committed either offline or online. These two ways are discussed below.

Offline Debit Card Fraud

Offline fraud occurs when a fraudster steals the physical card and uses it at the actual stores. Although offline fraud is still popular nowadays; it is less common because there is a higher probability to fail. More precisely, the cardholders tend to realize the loss of the physical card and report that to their bank before the fraudster manages to undertake any illegitimate transactions with it. As soon as the stolen card is reported to the bank, the latter will lock the card so as it cannot be used anymore. It is particularly useful to notice that if the cardholder does not realize the loss of their card, a significant financial loss can occur. As mentioned in the introduction chapter, the policies of some banks enforce cardholders to pay for the losses which occur due to an unreported Debit card theft. Notice that most of the UK banks tend to send the newly created cards via the post office. This is extremely dangerous because the cards may be stolen while they are on the way to cardholder’s destination address.

 

Online Debit Card Fraud

During online fraud only the details of the card are stolen and not the card itself. This is also known as virtual card theft. The details of the card can be used in places where the card need not be physically present like internet or phone purchases. This type of Debit card fraud is very dangerous and more difficult to prevent because fraudsters can hold Debit card’s information for a long period of time before they use it. There is no way for the cardholder to know in advance that their Debit card information is stolen. Therefore this type of fraud may only be detected after one or more illegitimate transactions are taken place.

There are various ways that fraudsters adapt in order to steal the information of Debit cards. Some of these ways are briefly discussed below.

Skimming

Patidar et al. (2011) define skimming as the “process where the actual data on a card’s magnetic stripe is electronically copied onto another”. Fraudsters use special-purpose devices – also known as skimmers – to capture the information of Debit cards that are encapsulated inside their magnetic stripes. They can use the stolen card information to create counterfeit physical cards in order to use them at actual shops or simply supply the card information at online shops. Skimming can be committed by an unfaithful employee, who may swipe customer’s card using the skimmer device, while the customer is at the point of sale. In the past, skimmer devices have also been introduced on ATM cash machines. In addition to that, micro-cameras have been used to record the PIN code of a cardholder during ATM transactions.

Site Cloning

Fraudsters clone a legitimate website to deceive customers into placing an order with them. Since the fraudulent website seems identical to the legitimate one, the unsuspecting customers provide their Debit card information to complete their order. Consequently fraudsters who obtained the customer’s Debit card information can commit Debit card fraud whenever they wish to.

False Merchant Sites According to Patidar et al. (2011) there are various websites that ask for Debit card information in order to confirm customer’s age. These websites will never charge the Debit cards directly but they may sell their information to fraudsters who will commit Debit card fraud.

Debit Card Generators

These are automated programs which make use of banks’ algorithms to generate Debit card numbers. Fraudsters can generate an arbitrary sequence of candidate numbers and then use other techniques – like trial and error – to figure out which numbers correspond to real Debit card accounts.

 

Phishing

Refers to the spam emails that are sent by fraudsters in order to deceive their victims and obtain their personal information. Fraudsters can impersonate a service provider or institute that victims collaborate with. In their email, fraudsters can make use of a convincing excuse to ask for victim’s personal information including Debit card details. The spam emails may also include links to fraudulent websites which again can deceive victims into revealing their personal information. Taking into account the enormous amount of spam emails that we receive at a daily basis, anyone can conclude that this type of fraud is still popular nowadays; although it has been out for many years.

 

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  • This topic contains:
  • Chapter 1-5
  • Abstract
  • References
  • Appendix/If applicable