System for detecting counterfeit financial card fraud

• US 6,094,643 A
• Filed: 03/12/1999
• Issued: 07/25/2000
• Est. Priority Date: 06/14/1996
• Status: Expired due to Term

• Current Assignee: Fair Isaac Corporation
• Original Assignee: Card Alert Services, Inc. (Fair Isaac Corporation)
• Inventors: Urban, Michael J., Anderson, Douglas D., Urban, Richard H., Deterding, Eric L.
• Primary Examiner(s): Stamber, Eric W.
• Assistant Examiner(s): Jeanty, Romain
• Application Number:
  US09/266,733
• Time in Patent Office: 501 Days
• Field of Search: 705/41, 705/44, 705/1, 705/35, 705/38, 705/39, 705/42, 235/379, 235/380, 235/382.5, 379/91.01, 379/144, 379/93.02, 340/825.31
• US Class Current: 705/44
• CPC Class Codes: G06Q 20/04 Payment circuits
• CPC Class Codes: G06Q 20/10 specially adapted for electronic funds transfer [EFT] systems; specially adapted for home banking systems
• CPC Class Codes: G06Q 20/105 involving programming of a portable memory device, e.g. IC cards, "electronic purses"
• CPC Class Codes: G06Q 20/108 Remote banking, e.g. home banking
• CPC Class Codes: G06Q 20/24 Credit schemes, i.e. "pay after"
• CPC Class Codes: G06Q 20/40 Authorisation, e.g. identification of payer or payee, verification of customer or shop credentials; Review and approval of payers, e.g. check credit lines or negative lists
• CPC Class Codes: G06Q 20/4016 involving fraud or risk level assessment in transaction processing
• CPC Class Codes: G06Q 20/403 Solvency checks
• CPC Class Codes: G06Q 20/4037 Remote solvency checks
• CPC Class Codes: G06Q 30/0185 Product, service or business identity fraud
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof
• CPC Class Codes: G07F 7/08 by coded identity card or credit card or other personal identification means without personal verification means G07F7/02

Abstract

Counterfeit financial card fraud is detected based on the premise that the fraudulent activity will reflect itself in clustered groups of suspicious transactions. A system for detecting financial card fraud uses a computer database comprising financial card transaction data reported from a plurality of financial institutions. The transactions are scored by assigning weights to individual transactions to identify suspicious transactions. The geographic region where the transactions took place as well as the time of the transactions are recorded. An event building process then identifies cards involved in suspicious transactions in a same geographic region during a common time period to determine clustered groups of suspicious activity suggesting an organized counterfeit card operation which would otherwise be impossible for the individual financial institutions to detect.

Claims

1. A computer-implemented system for detecting potential counterfeit financial cards, comprising:

a computer database comprising financial card transaction data reported from a plurality of financial institutions;

scoring means for assigning weights to individual transactions to identify suspicious transactions, the suspicious transactions and particular cards involved in the suspicious transactions being assigned a score;

means for categorizing said suspicious transactions into event groups based on a geographic region where said suspicious transactions occurred and a time when said suspicious transactions occurred;

event scoring means for scoring said event groups based on transaction scores and card scores in said event groups to identify financial cards involved in a suspicious transaction in a same geographic region during a common time period to identify a cluster of potential counterfeit financial cards.

2. A computer-implemented system for detecting potential counterfeit financial cards as recited in claim 1 wherein said common time period comprises one hour.

3. A computer-implemented system for detecting potential counterfeit financial cards as recited in claim 1 wherein said geographic region comprises one of a continent, a country, a region, a group of states, a county, a zip code, a census tract, a block group and a block.

4. A computer-implemented system for detecting potential counterfeit financial cards as recited in claim 1 wherein said geographic region comprises regions having same first digits of a zip code region.

5. A computer-implemented system for detecting potential counterfeit financial cards as recited in claim 1 wherein said suspicious transactions are determined by analyzing standard industrial codes (SICs) of entities where said transactions took place.

6. A computer-implemented system for detecting potential counterfeit financial cards as recited in claim 5 wherein said suspicious transactions are further determined a dollar amount involved and a transaction successful or transaction denied status.

7. A computer-implemented system for detecting potential counterfeit financial cards as recited in claim 1 wherein said financial cards are one of credit cards and debit cards.

8. A computer-implemented method for detecting probable counterfeit financial cards, comprising the steps of:

storing in a computer database financial card transaction data reported from a plurality of financial institutions, said data comprising a geographic region where individual transactions occurred and a time when said individual transactions occurred;

scoring individual transactions to identify suspicious transactions and scoring financial cards involved in said suspicious transactions;

categorizing said suspicious transactions into event groups based on a geographic region where said suspicious transactions occurred and a time when said suspicious transactions occurred; and

scoring said event groups based on transaction scores and card scores in said event groups to identify financial cards involved in a suspicious transaction in a same geographic region during a common time period to identify a cluster of potential counterfeit financial cards.

9. A computer-implemented method for detecting probable counterfeit financial cards as recited in claim 8 wherein said time period comprises one hour.

10. A computer-implemented method for detecting probable counterfeit financial cards as recited in claim 8 wherein said geographic region comprises one of a continent, a country, a region, a group of states, a county, a zip code, a census tract, a block group and a block.

11. A computer-implemented method for detecting probable counterfeit financial cards as recited in claim 8 wherein said geographic region comprises regions having same first four digits of a zip code region.

12. A computer-implemented method for detecting probable counterfeit financial cards as recited in claim 8 wherein said suspicious transactions are determined by analyzing standard industrial codes (SICs) of entities where said transactions took place.

13. A computer-implemented method for detecting probable counterfeit financial cards as recited in claim 8 wherein said suspicious transactions are further determined a dollar amount involved and a transaction successful or transaction denied status.

14. A computer-implemented method for detecting probable counterfeit financial cards as recited in claim 8 further comprising the step of chaining together events by identifying clusters in different events containing common cards.