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Privacy-Enhanced Fraud Detection with Bloom Filters

  • Daniel Arp
  • Erwin Quiring
  • Tammo Krueger
  • Stanimir Dragiev
  • Konrad Rieck
Conference paper
Part of the Lecture Notes of the Institute for Computer Sciences, Social Informatics and Telecommunications Engineering book series (LNICST, volume 254)

Abstract

The online shopping sector is continuously growing, generating a turnover of billions of dollars each year. Unfortunately, this growth in popularity is not limited to regular customers: Organized crime targeting online shops has considerably evolved in the past years, causing significant financial losses to the merchants. As criminals often use similar strategies among different merchants, sharing information about fraud patterns could help mitigate the success of these malicious activities. In practice, however, the sharing of data is difficult, since shops are often competitors or have to follow strict privacy laws. In this paper, we propose a novel method for fraud detection that allows merchants to exchange information on recent fraud incidents without exposing customer data. To this end, our method pseudonymizes orders on the client-side before sending them to a central service for analysis. Although the service cannot access individual features of these orders, it is able to infer fraudulent patterns using machine learning techniques. We examine the capabilities of this approach and measure its impact on the overall detection performance on a dataset of more than 1.5 million orders from a large European online fashion retailer.

Notes

Acknowledgments

The authors would like to thank Alwin Maier and Paul Schmidt for their assistance during the research project. Moreover, the authors gratefully acknowledge funding from the German Federal Ministry of Education and Research (BMBF) under the project ABBO (FKZ: 13N13634).

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Copyright information

© ICST Institute for Computer Sciences, Social Informatics and Telecommunications Engineering 2018

Authors and Affiliations

  • Daniel Arp
    • 1
  • Erwin Quiring
    • 1
  • Tammo Krueger
    • 2
  • Stanimir Dragiev
    • 2
  • Konrad Rieck
    • 1
  1. 1.Technische Universität BraunschweigBraunschweigGermany
  2. 2.Zalando Payments GmbHBerlinGermany

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