Documentation of rule-based fraud detection logic and decision trees for identifying suspicious activities across multiple channels.

This repository contains comprehensive documentation of rule-based fraud detection systems, including decision trees, scoring methodologies, and trigger conditions. The rules engine approach combines automated detection with configurable thresholds to balance fraud prevention with customer experience.

• High-Value Transactions: Flags transactions exceeding predefined thresholds
• Velocity Checks: Multiple transactions in short time periods
• Round Dollar Amounts: Unusually round transaction amounts (potential testing)
• Declined Transaction Patterns: Multiple declined attempts followed by successful transaction

• Address Changes: Recent address modification followed by large purchase
• Payment Method Changes: New payment methods added and immediately used
• Account Takeover Indicators: Login from new device/location with immediate changes
• Dormant Account Activity: Sudden activity on previously inactive accounts

• Impossible Travel: Transactions from distant locations in unrealistic timeframes
• High-Risk Locations: Transactions from known fraud hotspots
• IP/BIN Mismatch: Card-issuing country doesn't match transaction IP location

• Sequential Account Numbers: Testing with incrementing card numbers
• Rapid Account Creation: Multiple accounts from same device/IP
• Suspicious Email Patterns: Free email providers with random character strings

Transaction Received
├─ Amount > $5000?
│  ├─ Yes → Score +30
│  └─ No → Continue
├─ First transaction on account?
│  ├─ Yes → Score +20
│  └─ No → Continue
├─ Shipping address = billing address?
│  ├─ No → Score +15
│  └─ Yes → Continue
├─ Device fingerprint matches history?
│  ├─ No → Score +25
│  └─ Yes → Continue
│
Total Score:
├─ 0-20: Auto-approve
├─ 21-50: Manual review
└─ 51+: Auto-decline

• Low Risk (0-20): Proceed with transaction
• Medium Risk (21-50): Queue for fraud analyst review
• High Risk (51-75): Decline with option for customer verification
• Critical Risk (76+): Auto-decline and flag account

• Rules reviewed quarterly based on fraud trends
• Thresholds adjusted using ROC curve analysis
• False positive rates monitored and optimized
• New rules added based on emerging fraud patterns

• Real-time transaction screening
• Batch processing for account reviews
• Case management system for manual review queue
• Reporting dashboard for rule performance metrics