Project Report on

Fake Credit Card Detection

at
U. V. Patel College of Engineering

Internal Guide : Prepared By:

Prof. Kavindra M Patel Mr.Palle Chakravarthi(21012531012)
Mr.Vellanki Hemanth(21012531029)
Mr.Vootla Venkatrao(21012531031)

B.Tech Semester V (Computer Engineering)

December 2023

Submitted to,
Department of Computer Engineering / Information Technology
U.V. Patel College of Engineering
Ganpat University, Kherva - 384 012
 U.V. PATEL COLLEGE OF
ENGINEERING

DD/MM/YY

C E R T I FI CAT E
TO WHOM SO EVER IT MAY CONCERN

This is to certify that Mr.Palle Chakravarthi student of B.Tech. Semester V

(Computer Engineering) has completed his/her full semester Capstone Project
work titled “Fake Creditcard Detection” satisfactorily in partial fulfillment of
the requirement of Bachelor of Technology degree of Computer Engineering of
Ganpat
University, Kherva, Mehsana in the year 2023-2024.

College Project Guide

Sign Dr. Paresh Solanki,

Head, Computer Engineering
Prof. Kavindra M Patel
 U.V. PATEL COLLEGE OF
ENGINEERING

DD/MM/YY

C E R T I FI CAT E
TO WHOM SO EVER IT MAY CONCERN

This is to certify that Mr. Vellanki Hemanth student of B.Tech. Semester V

(Computer Engineering) has completed his full semester Capstone Project work
titled “Fake Creditcard Detection” satisfactorily in partial fulfillment of the
requirement of Bachelor of Technology degree of Computer Engineering of
Ganpat
University, Kherva, Mehsana in the year 2023-2024.

College Project Guide

Sign Dr. Paresh Solanki,

Head, Computer Engineering
Prof. Kavindra M Patel
 U.V. PATEL COLLEGE OF
ENGINEERING

DD/MM/YY

C E R T I FI CAT E
TO WHOM SO EVER IT MAY CONCERN

This is to certify that Mr. Vootla VenkatRao student of B.Tech. Semester V

(Computer Engineering) has completed his full semester Capstone Project work
titled “Fake Creditcard Detection” satisfactorily in partial fulfillment of the
requirement of Bachelor of Technology degree of Computer Engineering of
Ganpat
University, Kherva, Mehsana in the year 2023-2024.

College Project Guide

Sign Dr. Paresh Solanki,

Head, Computer Engineering
Prof. Kavindra M Patel
 Acknowledgement

This satisfaction that successful completion of any task would be incomplete without the mention of people
whose ceaseless cooperation it made it possible, whose constant guidance and encouragement crown all
efforts with success. We are grateful to our guide Prof. Kavindra M Patel for the guidance, inspiration and
constructive suggestions that helpful us in the preparation of this project. We also thank our colleagues who
have helped in successful completion of the project.
 Abstract
The increasing prevalence of credit card fraud poses significant challenges to financial institutions and
individuals alike. Traditional fraud detection methods struggle to keep pace with the ever-evolving
techniques employed by fraudsters. As a result, there is a pressing need to adopt advanced technologies such
as Artificial Intelligence (AI) and Machine Learning (ML) to combat this issue effectively. This project aims
to develop a robust and efficient system for detecting fake credit card transactions using AI and ML
techniques.

The proposed system leverages a diverse dataset of genuine and fraudulent credit card transactions to train
and validate various ML models. Data preprocessing techniques are applied to clean and transform the raw
data, ensuring its suitability for analysis. Feature engineering is employed to extract relevant information and
optimize the model's performance. Different ML algorithms, including logistic regression, decision trees,
random forests, and neural networks, are explored to identify the most accurate and efficient one for the task.

In conclusion, this project presents a comprehensive framework for detecting fake credit card transactions
using AI and ML techniques. By harnessing the power of advanced algorithms and innovative data analysis
methods, the proposed system offers financial institutions a potent defense against fraudulent activities,
ultimately safeguarding customers' assets and fostering trust in digital transactions. The research and insights
gained from this project can have significant implications for the broader field of AI-based fraud detection
and contribute to making financial systems more secure and resilient in the face of evolving threats.

.
 INDEX
1. INTRODUCTION …………………………………………………………………..
2. Literature Survey…………………………………………………………………………………...

2.1 Introduction………………………………………………………………………………………

2.2 Unsupervised outlier detection technique………………………………………………………..

2.3 Supervised outlier detection technique…………………………………………………………..

3. SOFTWARE REQUIREMENTS
3.1 Functional Requirements………………………………………………………………………

3.1.1 Card data validation ………………………………………………………………………

3.1.2 Pattern analysis……………………………………………………………………………

3.1.3 Machine learning algorithms……………………………………………………………...

3.1.4 Manual review interface…………………………………………………………………..

3.1.5 Integration with External data source……………………………………………………

3.1.6 Real-time monitoring……………………………………………………………………..

3.1.7 Alerts and Notifications…………………………………………………………………..

3.1.8 Card Blocking/Flagging………………………………………………………………….

3.1.9 User feedback Loop……………………………………………………………………....
3.2 Non functional Requirement…………………………………………………………………..

3.2.1 Performance……………………………………………………………………………….

3.2.2 Security……………………………………………………………………………………

3.2.3 Reliability…………………………………………………………………………………..

3.2.4 Usability …………………………………………………………………………………..

3.2.5 Scalability………………………………………………………………………………….
4. SYSTEM DIAGRAM………………………………………………………………….
4.1 Use Case Diagram…………………………………………………………………………...

4.2 State Diagram………………………………………………………………………………..

4.3 State Diagram……………………………………………………………………………….

5.Pototype….………………………………………………………………………………
5.1 Register……………………………………………………………………………………....

5.2 Login…………………………………………………………………………………………

5.3 Contact………………………………………………………………………………………..

6.Future Work………………………………………………………………………………………........

7.Conclusion…………………………………………………………………………………………........

8.Reference………………………………………………………………………………………………..
 List of Figures
Figure 1.Use Case Diagram………………………………………………………………………….

Figure 2.State Diagram ……………………………………………………………………………..

Figure 3.Activity Diagram for Admin………………………………………………………………

Figure 4.Activity Diagram for User…………………………………………………………………

Figure 5.Register…………………………………………………………………………………….

Figure 6.login………………………………………………………………………………………..

Figure 7.Contact……………………………………………………………………………………..
 1. INTRODUCTION

In the rapidly evolving landscape of digital transactions and e-commerce, the prevalence of fraudulent
activities, particularly in the form of fake credit card usage, has become a pressing concern for individuals,
businesses, and financial institutions alike. The advent of technology has not only revolutionized the way we
conduct financial transactions but has also opened new avenues for sophisticated criminals to exploit
vulnerabilities in the payment system.

Detecting fake credit card usage has thus become a critical imperative to safeguard the financial interests of
both consumers and businesses. This escalating issue demands robust solutions that leverage cutting-edge
technologies, data analysis, and machine learning algorithms to differentiate between legitimate and
fraudulent credit card transactions.

This comprehensive guide explores the intricacies of fake credit card detection, delving into the techniques,
tools, and strategies employed to identify and prevent fraudulent activities in the realm of electronic
payments. By understanding the dynamics of fake credit card usage and the mechanisms devised to combat
it, we empower individuals and organizations to take proactive steps in securing their financial transactions,
maintaining trust in digital commerce, and ultimately safeguarding their economic well-being.
 2. Literature Survey

2.1 Introduction
The fraud detection is a complex task and there is no system that correctly predicts any transaction as
fraudulent.
The properties for a good fraud detection system are:

1.Should identify the frauds accurately.

2.Should detect the frauds quickly.

3.Should not classify a genuine transaction as fraud.

Outlier detection is a critical task as outliers indicate abnormal running conditions from which significant
performance degradation may happen. Techniques used in fraud detection can be divided into two:

1)Supervised techniques where past known legitimate/fraud cases are used to build a model which will
produce a suspicion score for the new transactions.

2)Unsupervised are those where there are no prior sets in which the state of the transactions are known to

be fraud or legitimate.

1.1 Unsupervised outlier detection technique:

An unsupervised outlier detection technique does not make any assumption about the availability of labeled
data. This method simply seek those accounts, customer etc, whose behavior is “unusual” . Unsupervised
methods are useful in applications where there is no prior knowledge about the particular class of
observations in a data set. An advantage of using unsupervised methods over supervised methods is that
previously occurred undiscovered types of fraud may be detected.

1.2 Supervised outlier detection technique:

Supervised outlier detection techniques assume the availability of a data set which has been needed for the
normal as well as the outlier class. Supervised method detects fraudulent transactions that can be used to
differentiate between those accounts or transactions which are known to be fraudulent and those which are
known to be legitimate. Classification techniques such as statistical discriminate analysis and neural
networks can be used to discriminate between fraudulent and non-fraudulent transactions to give transactions
a suspicion score. Supervised methods are only trained to differentiate between legitimate transactions and
previously known fraud.
 3.SOFTWARE REQUIREMENT SPECIFICATIONS

3.1 Functional Requirements

3.1.1 Card Data Validation:

Validate credit card number, expiration date, and cvv code formats

3.1.2 Pattern Analysis

Analyze transaction patterns to identify unusual behavior (e.g., multiple transactions within a
short time frame, transactions from various locations).

3.1.3 Machine Learning Algorithms: Implement machine learning models to identify patterns
associated with fake credit cards.
3.1.4 Manual Review Interface: Provide analysts with an interface to review flagged transactions and
make informed decisions.
3.1.5 Integration with External Data Sources: Integrate with external databases or APIs to
crossreference cardholder information with known fraudulent accounts.
3.1.6 Real-time Monitoring: Monitor transactions in real time and generate immediate alerts for
suspicious activities.

3.1.7 Alerts and Notifications: Generate alerts and notifications for users and administrators when
potential fake card transactions are detected.
3.1.8 Card Blocking/Flagging: Automatically block or flag transactions associated with suspected fake
cards based on predefined rules.
3.1.9 User Feedback Loop: Enable analysts to provide feedback on flagged transactions to improve
future detection accuracy.
3.1.10 Historical Analysis:Allow analysts to perform historical analysis to identify long-term patterns
of fraudulent behavior.
3.1.11 Reporting and Analytics: Generate reports and analytics related to detected fake card instances,
their characteristics, and outcomes.
3.2 Non-Functional Requirements

3.2.1 Performance: The system should process transactions with minimal latency and handle high
transaction volumes efficiently.

3.2.2 Security:User authentication, data encryption, and access controls should be implemented to
ensure data security and privacy.

3.2.3 Reliability: The system should have a high uptime and minimal downtime for critical maintenance

3.2.4 Usability: The user interface should be intuitive and easy to use for both administrators and
analysts.
3.2.5 Scalability: The system should be designed to accommodate increased transaction volumes as the
user base grows.
 4.SYSTEM DIAGRAM

4.1 Use Case Diagram

Figure 1.Use Case Diagram

4.2 State Diagram

Figure 2.State Diagram

4.3Activity diagram

4.3.1 Activity diagram for Admin

Figure 3.Activity Diagram for Admin

4.3.2 Activity Diagram for User

Figure 4.Activity Diagram for user

 5.Prototype

5.1 Register

Figure 5 Register
5.2 Login

Figure 6 Register
5.3 Contact

Figure 7 Contact
 6. Future work

In this proposed , In future we can detect the fake credit cards by their transactions history and their
locations.Then we can find the User history by enetering their details.So bringing the machine learning
algorithms we can detects the fraud transactions.
 7. Conclusion
In conclusion, this project presents a comprehensive framework for detecting fake credit card
transactions using AI and ML techniques. By harnessing the power of advanced algorithms and
innovative data analysis methods, the proposed system offers financial institutions a potent defense
against fraudulent activities, ultimately safeguarding customers' assets and fostering trust in digital
transactions. The research and insights gained from this project can have significant implications for the
broader field of AI-based fraud detection and contribute to making financial systems more secure and
resilient in the face of evolving threats.
 8. Reference
[1] L. Delamaire, H. Abdou and J. Poinon, “Credit card fraud and detection techniques: a review”,
Banks and Bank Systems, Volume 4, Issue 2, 2009.

[2] Suman and Nutan “Review paper on credit card fraud detection”, International Journal of Computer
Trends and Technology (IJCTT) – volume 4 Issue 7–July 2013.

[3] Y. Sahin and E. Duman, “Detecting credit card fraud by decision trees and support vector
machines”, International Multiconference of Engineers and computer scientists March, 2011.