Call-Based Fraud Detection in Mobile Communication Networks Using a Hierarchical Regime-Switching Model

Part of Advances in Neural Information Processing Systems 11 (NIPS 1998)

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Jaakko Hollmén, Volker Tresp


Fraud causes substantial losses to telecommunication carriers. Detec(cid:173) tion systems which automatically detect illegal use of the network can be used to alleviate the problem. Previous approaches worked on features derived from the call patterns of individual users. In this paper we present a call-based detection system based on a hierarchical regime-switching model. The detection problem is formulated as an inference problem on the regime probabilities. Inference is implemented by applying the junc(cid:173) tion tree algorithm to the underlying graphical model. The dynamics are learned from data using the EM algorithm and subsequent discriminative training. The methods are assessed using fraud data from a real mobile communication network.