FRAUD DETECTION AND PREVENTION - Prompt¶

Fraud Detection at Contoso Bank: Prioritizing Potential Fraud Cases¶

Question¶

As an analyst in Contoso Bank's Fraud Investigation Team, your tasks are: 1. Shortlist the top 5 customers who are most likely victims of actual fraud, based on the data provided. 2. For each of the top 5 customers, provide a rationale explaining why they should be prioritized for investigation. 3. Predict which of the top 5 customers are actual fraud cases.

Note: The number of actual fraud cases in the dataset ranges from 0 to 4. Your analysis should aim to: - Identify true fraud cases to prevent financial loss. - Minimize false positives to avoid unnecessary customer friction and maintain customer satisfaction.

Instruction¶

Thoroughly analyze the provided datasets to identify patterns and indicators of fraudulent activity.
Use quantitative analysis and logical reasoning to support your conclusions.
Include all intermediate calculations and reasoning steps.
Reference specific data points from the datasets in your rationale.
Provide a brief executive summary at the beginning of your solution, highlighting your key findings and recommendations.
Present your findings in a clear and concise manner, suitable for presentation to the Fraud Investigation Team.

Background¶

Contoso Bank employs advanced fraud detection systems to monitor transactions and identify potential fraudulent activities in real-time. Recently, the bank's systems have flagged 30 customers for potential fraud. The Fraud Investigation Team needs to prioritize these cases to efficiently allocate resources and minimize customer friction.

Below are datasets collected from various systems, including transaction logs, customer profiles, device usage patterns, and internal compliance reports. The data includes both relevant and additional information to provide a comprehensive view of each customer's activity.

Dataset 1: Customer Transaction Summary¶

Customer ID Total Transactions Last 24 Hours Total Amount Last 24 Hours (USD) Average Transaction Amount (USD) Flagged Transactions C001 5 $250 $50 No C002 50 $10,000 $200 Yes C003 3 $90 $30 No C004 4 $400 $100 No C005 35 $7,000 $200 Yes C006 6 $600 $100 No C007 2 $100 $50 No C008 3 $300 $100 No C009 7 $700 $100 No C010 5 $250 $50 No C011 8 $800 $100 No C012 6 $300 $50 No C013 10 $500 $50 No C014 12 $1,200 $100 No C015 40 $8,000 $200 Yes C016 4 $400 $100 No C017 5 $500 $100 No C018 3 $300 $100 No C019 6 $600 $100 No C020 2 $100 $50 No C021 3 $150 $50 No C022 4 $200 $50 No C023 45 $9,500 $211 Yes C024 5 $500 $100 No C025 6 $600 $100 No C026 7 $700 $100 No C027 8 $800 $100 No C028 9 $900 $100 No C029 2 $200 $100 No C030 25 $2,500 $100 Yes

Dataset 2: Fraud Risk Scores¶

Customer ID Fraud Risk Score (0 - 100)

C001 20 C002 95 C003 15 C004 40 C005 88 C006 35 C007 25 C008 30 C009 45 C010 50 C011 60 C012 55 C013 40 C014 42 C015 94 C016 35 C017 40 C018 38 C019 42 C020 50 C021 55 C022 60 C023 70 C024 30 C025 35 C026 40 C027 60 C028 65 C029 70 C030 80

Dataset 3: Customer Profiles¶

Customer ID Account Age (Years) Account Type Previous Fraud History VIP Customer

C001 5 Savings No No C002 0.5 Checking No No C003 10 Savings and Checking Yes Yes C004 2 Checking No No C005 1 Checking No No C006 3 Savings No No C007 7 Savings No No C008 8 Savings No No C009 2 Checking No No C010 4 Savings No No C011 5 Checking No No C012 6 Savings No No C013 3 Checking No No C014 2 Savings No No C015 1 Savings No No C016 2 Checking No No C017 3 Savings No No C018 4 Checking No No C019 5 Savings No No C020 6 Checking No No C021 3 Savings No No C022 2 Checking No No C023 2 Checking Yes No C024 3 Savings No No C025 4 Checking No No C026 5 Savings No No C027 6 Checking No No C028 7 Savings No No C029 3 Checking No No C030 3 Savings No No

Dataset 4: Device Usage Patterns¶

Customer ID Registered Devices New Devices Used Last 24h Suspicious Device Activity

C001 2 0 No C002 1 5 Yes C003 3 0 No C004 2 0 No C005 2 2 Yes C006 2 0 No C007 1 0 No C008 2 0 No C009 2 0 No C010 2 0 No C011 2 1 No C012 2 0 No C013 2 1 No C014 2 0 No C015 1 4 Yes C016 2 0 No C017 2 0 No C018 2 0 No C019 2 0 No C020 1 0 No C021 2 1 No C022 2 0 No C023 2 3 Yes C024 2 0 No C025 2 0 No C026 2 0 No C027 2 0 No C028 2 0 No C029 2 0 No C030 2 2 Yes

Dataset 5: Transaction Location Analysis¶

Customer ID Home Location Transactions in Last 24h Locations Used Unusual Locations

C001 City A City A 1 No C002 City B Multiple Cities 5 Yes C003 City C City C 1 No C004 City D City D 1 No C005 City E City E 1 No C006 City F City F 1 No C007 City G City G 1 No C008 City H City H 1 No C009 City I City I 1 No C010 City J City J 1 No C011 City K City K 1 No C012 City L City L 1 No C013 City M City M 1 No C014 City N City N 1 No C015 City D Multiple Cities 8 Yes C016 City O City O 1 No C017 City P City P 1 No C018 City Q City Q 1 No C019 City R City R 1 No C020 City S City S 1 No C021 City T City T 1 No C022 City U City U 1 No C023 City E Multiple Countries 3 Yes C024 City V City V 1 No C025 City W City W 1 No C026 City X City X 1 No C027 City Y City Y 1 No C028 City Z City Z 1 No C029 City AA City AA 1 No C030 City F City F 1 No

Dataset 6: Merchant Category Codes (MCC) Analysis¶

Customer ID Retail Travel Electronics Gambling

C001 70% 5% 10% 0% C002 10% 50% 30% 5% C003 60% 10% 20% 0% C004 80% 5% 5% 0% C005 15% 60% 15% 5% C006 50% 10% 20% 0% C007 70% 5% 10% 0% C008 80% 5% 5% 0% C009 65% 10% 15% 0% C010 70% 5% 10% 0% C011 75% 5% 5% 0% C012 60% 5% 20% 0% C013 55% 10% 15% 0% C014 80% 5% 5% 0% C015 20% 50% 20% 5% C016 75% 5% 10% 0% C017 70% 10% 10% 0% C018 65% 10% 15% 0% C019 60% 5% 20% 0% C020 70% 5% 10% 0% C021 80% 5% 5% 0% C022 75% 5% 5% 0% C023 15% 70% 10% 0% C024 65% 10% 15% 0% C025 70% 5% 10% 0% C026 80% 5% 5% 0% C027 60% 10% 20% 0% C028 75% 5% 10% 0% C029 70% 10% 10% 0% C030 85% 5% 5% 0%

Dataset 7: Customer Satisfaction Scores¶

Customer ID Satisfaction Score

C001 8.5 C002 6.0 C003 9.0 C004 8.0 C005 6.5 C006 7.5 C007 8.0 C008 8.2 C009 8.3 C010 8.5 C011 7.8 C012 8.1 C013 8.4 C014 8.6 C015 7.0 C016 7.5 C017 8.0 C018 8.2 C019 8.3 C020 8.5 C021 8.7 C022 8.8 C023 6.5 C024 8.2 C025 8.5 C026 8.0 C027 8.2 C028 8.3 C029 8.4 C030 7.5

Dataset 8: Internal Audit Flags¶

Customer ID AML Flags KYC Compliance Issues

C001 No No C002 Yes Yes C003 No No C004 No No C005 Yes No C006 No No C007 No No C008 No No C009 Yes Yes C010 No No C011 No No C012 Yes No C013 No No C014 No No C015 Yes No C016 No No C017 No No C018 No Yes C019 No No C020 No No C021 Yes Yes C022 No No C023 Yes Yes C024 No No C025 No No C026 No No C027 Yes Yes C028 No No C029 No No C030 No No

Dataset 9: Recent Customer Communications¶

Customer ID Contact Reason Date

C001 Account Inquiry 2023-09-15 C002 No Recent Contact N/A C003 Feedback on Service 2023-09-14 C004 Account Update 2023-09-13 C005 No Recent Contact N/A C006 Balance Inquiry 2023-09-10 C007 Account Inquiry 2023-09-11 C008 Feedback on Service 2023-09-12 C009 Account Update 2023-09-13 C010 Account Inquiry 2023-09-14 C011 No Recent Contact N/A C012 Balance Inquiry 2023-09-10 C013 Feedback on Service 2023-09-12 C014 Account Update 2023-09-13 C016 Account Inquiry 2023-09-14 C017 No Recent Contact N/A C018 Balance Inquiry 2023-09-10 C019 Feedback on Service 2023-09-12 C020 Account Update 2023-09-13 C021 Account Inquiry 2023-09-14 C022 No Recent Contact N/A C023 No Recent Contact N/A C024 Balance Inquiry 2023-09-10 C025 Feedback on Service 2023-09-12 C026 Account Update 2023-09-13 C027 Account Inquiry 2023-09-14 C028 No Recent Contact N/A C029 Balance Inquiry 2023-09-10 C030 Account Inquiry 2023-09-15

Customer ID Positive Mentions Negative Mentions

C001 2 0 C002 0 1 C003 1 0 C004 1 0 C005 0 0 C006 1 0 C007 2 0 C008 1 0 C009 0 0 C010 1 0 C011 1 0 C012 1 0 C013 1 0 C014 1 0 C015 0 1 C016 1 0 C017 1 0 C018 1 0 C019 1 0 C020 1 0 C021 1 0 C022 1 0 C023 0 1 C024 1 0 C025 1 0 C026 1 0 C027 1 0 C028 1 0 C029 1 0 C030 1 0

Dataset 11: Transcripts of Calls Made by the Customers¶

Call 1: Customer ID C002

Agent: Good morning! Thank you for calling Contoso Bank. How can I assist you today?

C002: Hi, I'm having trouble accessing my online banking account. I think I need to reset my password.

Agent: I can help you with that. For security purposes, I'll need to ask you a few identity verification questions. Can you tell me the name of your first pet?

C002: Oh, I don't remember what I set for that question.

Agent: No worries. Let's try another one. What is the street name where you grew up?

C002: I'm not sure about that one either. Is there another way I can verify my identity?

Agent: I can't authorize you unless you know your identity questions.

Call 2: Customer ID C005

Agent: Thank you for calling Contoso Bank. How may I assist you today?

C005: Hi, I wanted to inquire about updating my mailing address on file.

Agent: Sure, I can help with that. Could you please verify your account number and current address for security purposes?

C005: My account number is 123456789, and my current address is 123 Elm Street.

Agent: Thank you for verifying that information. What is your new address?

C005: It's 789 Oak Avenue.

Agent: Great, I've updated your address. Is there anything else I can help you with today?

C005: Yes, I'd like to register my banking on my new iPhone I've purchased, as well as my new iPad, can I do that?

Agent: You can simply download the app, and use your previous device to help authenticate it as a second factor check. Do you still have your old device?

C005: Yes, I do. Ok that sounds great thanks!

Call 3: Customer ID C006

Agent: Welcome to Contoso Bank. How can I help you today?

C006: Hello, I was wondering if I could get some information about my recent transactions. I think there's a mistake on my account.

Agent: I can assist you with that. Can you please confirm your account number and the specific transaction you're concerned about?

C006: My account number is 987654321, and it's a transaction from last week at GroceryMart.

Agent: Thank you. Let me check... It appears the amount charged was $75. Is that what you're seeing?

C006: Yes, but I only spent $55. Can we dispute this charge?

Agent: Absolutely. I'll initiate a dispute for you. You'll receive updates via email.

Call 4: Customer ID C008

Agent: Thank you for calling Contoso Bank. How may I assist you today?

C008: Hi, I wanted to check the interest rate on my savings account.

Agent: Certainly, could you please verify your account number?

C008: Yes, it's 555111222.

Agent: Thank you. Your current savings account interest rate is 1.5% annually.

C008: Great, thank you for the information. That's all I needed.

Agent: You're welcome! Have a great day.

Call 5: Customer ID C025

Agent: Good day! Thank you for calling Contoso Bank. How can I help you today?

C025: Hi, I need to reset my online banking password. I forgot it.

Agent: No problem. I'll send a verification code to your registered phone number. Could you confirm your number?

C025: Sure, it's 555-1234.

Agent: Thank you. I've sent the code. Please let me know once you receive it.

C025: I got it. The code is 6789.

Agent: Perfect. Your password has been reset. You'll receive an email with further instructions.

Call 6: Customer ID C030

Agent: Welcome to Contoso Bank. How may I help you?

C030: Hi, I received a credit card offer in the mail and wanted to know more about it.

Agent: Certainly! Could you provide me with the offer code mentioned in the letter?

C030: It's 123ABC.

Agent: Thank you. This offer includes a 0% introductory APR for 12 months and no annual fee for the first year.

C030: Sounds good. How do I apply?

Agent: I can help you with the application process over the phone, or you can apply online using the offer code.

C030: I'd like to apply now, please.

Agent: Great, let's get started!

Call 6: Customer ID C015

Agent: Good afternoon! Thank you for calling Contoso Bank. How can I assist you today?

C015: Hi, I'm planning to go on a holiday soon and I'm interested in applying for a travel credit card. Could you tell me more about the options you have?

Agent: Absolutely! We have a couple of great travel credit card options. Are you looking for a card with specific benefits, like no foreign transaction fees or travel rewards?

C015: Yes, I'm particularly interested in a card that offers travel rewards and has no foreign transaction fees.

Agent: In that case, I recommend our Contoso Travel Rewards Card. It offers 2x points on travel and dining, no foreign transaction fees, and a generous sign-up bonus if you spend a certain amount in the first three months.

C015: That sounds perfect. What is the annual fee for this card?

Agent: The annual fee is $95, but it's waived for the first year.

C015: Great! How do I apply for this card?

Agent: I can assist you with the application over the phone, or you can apply online through our website. Which would you prefer?

C015: Let's do it over the phone, please.

Agent: Certainly! I'll just need to gather some information to get started. Do you have a few minutes?

C015: Yes, I'm ready.

Agent: Great, let's begin!

Dataset 12: Recent Purchases for Customers¶

Customer ID Item Price C002 SIM Card - Brand A $10.00 C002 SIM Card - Brand B $12.00 C002 SIM Card - Brand C $8.00 C002 Old Android Phone Model $50.00 C003 Grocery items - Fresh Produce $30.00 C003 Household Cleaning Supplies $15.00 C003 Coffee Maker $45.00 C003 Paperback Novel $12.00 C001 Office Supplies - Pens and Notepads $20.00 C001 Streaming Service Subscription $9.99 C001 Gym Membership Renewal $50.00 C001 Bluetooth Headphones $75.00 C005 iPhone 16 XL $1300.00 C005 iPad 5G $1100.00 C010 Online Course - Digital Marketing $150.00 C010 Dining Out - Italian Restaurant $40.00 C010 Clothing - Casual T-Shirts $25.00 C010 Electric Toothbrush $60.00 C015 Flight Ticket - Mexico $350.00 C015 Flight Ticket - Denver $200.00 C015 Travel Pillow $15.00 C015 Sleeping Tablets $10.00 C028 Running Shoes - Brand X $80.00 C028 Yoga Mat $25.00 C028 Fitness Tracker $99.00 C028 Dumbbells Set $40.00