Impact Factor (2025): 6.9
DOI Prefix: 10.47001/IRJIET
Credit card
fraud poses a significant challenge in the digital era, necessitating advanced
techniques for early detection and prevention. This study presents a
comprehensive exploration into the design and implementation of a credit card
fraud detection system leveraging machine learning models, specifically Random
Forest and Logistic Regression. The research methodology involves preprocessing
a diverse and extensive credit card transaction dataset, encompassing various
transaction features. Through careful feature engineering, the dataset is
prepared for training and testing the Random Forest and Logistic Regression
models. The Random Forest model, employing ensemble learning, amalgamates
multiple decision trees to enhance predictive accuracy and resilience against
over fitting. Concurrently, Logistic Regression, a classical statistical
method, analyzes the relationship between input features and the likelihood of
fraudulent transactions. The comparative analysis of these models provides
insights into their respective strengths and weaknesses, aiding in the
selection of the most effective model for credit card fraud detection. The
evaluation phase assesses the performance of the models using key metrics such
as accuracy, precision, recall, and F1-score. A detailed examination of these
metrics under various scenarios sheds light on the models' ability to
distinguish between legitimate and fraudulent transactions. Real-world
implications of implementing these models in financial institutions or credit
card companies are discussed, emphasizing the potential for enhanced security
and reduced financial losses. Moreover, this study discusses the ethical
considerations and challenges associated with deploying machine learning models
in fraud detection systems. Privacy concerns, model interpretability, and the
dynamic nature of fraud patterns are acknowledged, providing a holistic view of
the practical implications of implementing such systems. Finally, the findings
of this research contribute valuable insights to the ongoing efforts in
combating credit card fraud. The comprehensive analysis of Random Forest and
Logistic Regression models, coupled with real-world applicability and ethical
considerations, positions this study as a significant advancement in the field
of financial security and fraud prevention.
Country : Nigeria
IRJIET, Volume 9, Issue 2, February 2025 pp. 152-166