Apparatus, System, Method and Computer Program Product for Analysis of Fraud in Transaction Data

• US 20080109272A1
• Filed: 11/08/2006
• Published: 05/08/2008
• Est. Priority Date: 11/08/2006
• Status: Abandoned Application

• Current Assignee: International Business Machines Corporation
• Original Assignee: International Business Machines Corporation
• Inventors: Sheopuri, Anshul, Boier-Martin, Ioana, Centonze, Paolina, Zeng, Sai, Gomes, Jose
• Application Number:
  US11/557,520
• Publication Number:
  US 20080109272A1
• Time in Patent Office: Days
• US Class Current: 705/7
• CPC Class Codes: G06Q 10/10 Office automation; Time management
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes

Abstract

In one non-limiting aspect thereof the exemplary embodiments of this invention provide a computer-implemented method to make a decision as to whether a particular claim submitted by a first economic agent for approval by a second economic agent may be a fraudulent claim. The method includes applying statistics to information representing a proxy of fraud to generate an estimate of a probability of fraud for the particular claim; updating the estimate of the probability of fraud using decision making under uncertainty that is based at least in part on at least one type of additional information; applying game theory to the updated estimate of the probability of fraud to model strategic behavior between the first and second economic agents; and generating a recommendation to audit or not audit the particular claim. The proxy of fraud may be imperfect proxy of fraud, such as is found in nascent industries.

Claims

1. A computer-implemented method to make a decision as to whether a particular claim submitted by a first economic agent for approval by a second economic agent may be a fraudulent claim, comprising:

applying statistics to information representing a proxy of fraud to generate an estimate of a probability of fraud for the particular claim;

updating the estimate of the probability of fraud using decision making under uncertainty that is based at least in part on at least one type of additional information;

applying game theory to the updated estimate of the probability of fraud to model strategic behavior between the first and second economic agents; and

generating a recommendation to audit or not audit the particular claim.

2. The computer-implemented method of claim 1, where a statistics model uses an available or a derived perfect or imperfect proxy as a dependent variable, and where independent variables may be available attributes or derived attributes.

3. The computer-implemented method of claim 1, where the particular claim comprises an expense report claim.

4. The computer-implemented method of claim 1, where applying game theory applies a Stackelberg game.

5. The computer-implemented method of claim 1, where applying statistics comprises statistical modeling using a discrete choice model.

6. The computer-implemented method of claim 5, where using a discrete choice model comprises using one of a Logit or Probit model with an imperfect proxy of fraud as a dependent variable.

7. A computer program product embodied on a tangible memory media and comprising program instructions the execution of which by a data processor result in operations to detect if a particular claim submitted by a first economic agent for approval by a second economic agent may be a fraudulent claim, comprising operations of:

applying a statistic model to information representing an imperfect proxy of fraud to generate an estimate of a probability of fraud for the particular claim;

updating the estimate of the probability of fraud using decision making under uncertainty that is based at least in part on at least one type of additional information;

using game theory with the updated estimate of the probability of fraud to model strategic behavior between the first and second economic agents; and

generating a recommendation to audit or not audit the particular claim.

8. The computer program product of claim 7, where the statistics model uses the imperfect proxy of fraud as a dependent variable, and where independent variables may be available attributes or derived attributes.

9. The computer program product of claim 7, where the particular claim comprises an expense report claim.

10. The computer program product of claim 7, where using game theory comprises using a Stackelberg game.

11. The computer program product of claim 7, where applying statistics comprises statistical modeling using a discrete choice model.

12. The computer program product of claim 11, where using a discrete choice model comprises using one of a Logit or Probit model with the imperfect proxy of fraud as a dependent variable.

13. A data processor comprising:

an input for receiving a claim submitted by a first economic agent for approval by a second economic agent;

a claim processing unit coupled to the input and adapted to detect if the claim may be a fraudulent claim; and

an output coupled to the claim processing unit for outputting a recommendation to audit or not audit the claim;

where said claim processing unit is adapted to apply a statistic model to information representing an imperfect proxy of fraud to generate an estimate of a probability of fraud for the claim, to update the estimate of the probability of fraud using decision making under uncertainty that is based at least in part on at least one type of additional information, and to use game theory with the updated estimate of the probability of fraud to model strategic behavior between the first and second economic agents.

14. The data processor of claim 13, where the statistics model uses the imperfect proxy of fraud as a dependent variable, and where independent variables may be available attributes or derived attributes.

15. The data processor of claim 13, where the claim comprises an expense report claim.

16. The data processor of claim 13, where the data processor when using game theory uses a Stackelberg game.

17. The data processor of claim 13, where the data processor when applying statistics applies a statistical model comprised of a discrete choice model.

18. The data processor of claim 17, where the data processor when using the discrete choice model comprises using one of a Logit or Probit model with the imperfect proxy of fraud as a dependent variable.

19. A computer program product embodied on a tangible memory media and comprising program instructions the execution of which by a data processor result in operations to make an auditing decision for a claim submitted by a claimant, the operations comprising:

estimating β

from a statistical model, M;

computing p_R using the estimate β

of M;

computing p_H from H;

using a Weak Axiom of Revealed preferences, computing X_R and X_H;

using update mechanism Φ

, compute X′

_R;

computing p_R*; and

making an affirmative audit decision if b_p*(x_R)=1;

where x represents relevant attributes of a claim record C, where β

is an estimate of coefficients of M using a dependent variable as a best available imperfect audit proxy and independent variables x, where x_R are relevant attributes of a particular record, R, on which an auditing decision is to be made, where c_R is a claim record corresponding to record R, where p_R is a fraud level from the model, M and is given by

p_R=Λ

(x_R^Tβ

),

where Λ

(.) is a cumulative distribution function of logistic distribution, where H is a set of relevant attributes of historical records of record c_R, where p_H is a historical fraud level of the claimant from the model M, where E_x is a claim amount corresponding to relevant attributes x of the claim C, and where p_H is given by

20. The computer program product as in claim 19, where the claim comprises a travel and expenses claim.