A Project report on

“CREDIT CARD FRUAD DETECTION

USING MACHINE LEARNING”
Submitted in partial fulfillment of
the requirements for the award of the degree of

Bachelor of Technology
In
Computer Science & Engineering
By
M.BINDU (16JF1A0502)
D.TRIVENI (16JF1A0525)
G.KAMALA (16JF1A0510)
B.RAJENDRA (16JF1A0518)

Under the esteemed guidance of

D. THAKUR M.Tech (CST)

Associate Professor

DEPARTMENT OF COMPUTER SCIENCE & ENGINEERING

GANDHIJI INSTITUTE OF SCIENCE AND TECHNOLOGY
(Approved By AICTE, Affiliated to JNTUK) Gattu Bhimavaram, Jaggayyapet–521 178

(2016-2020)
 GANDHIJI INSTITUTE OF SCIENCE AND TECHNOLOGY
(Approved By AICTE, Affiliated to JNTUK) Gattu Bhimavaram, Jaggayyapet– 521 178

Website: www.gistech.co.in

CERTIFICATE

This is to certify that project work entitled “ CREDIT CARD FRUAD DETECTION

USING MACHINE LEARNING ” is being submitted for the partial fulfillment of Bachelor

of Technology in Computer Science and Engineering to Gandhiji Institute of Science and

Technology, Gattu Bhimavaram, Jaggayyapet is bonafide work done by M.BINDU

(16JF1A0502), D.TRIVENI (16JF1A0525), G.KAMALA (16JF1A0510), B.RAJENDRA

(16JF1A0518) during the academic year 2016-2020 under our guidance and supervision, and, it has

been found worthy of acceptance according to the requirement of the university.

Internal Guide Head of the Department

D. THAKUR M. Tech (CST) D. THAKUR M. Tech
(CST)
Associate Professor Associate Professor

External Examiner Principal

 ACKNOWLEDGEMENT

We express thanks and gratitude and thanks to Almighty God, my parents and other family
members and friends without whose un-sustained support to without which we could not have
made this career in B. Tech (Computer Science and Engineering).

We express thanks and gratitude and thanks to President Dr. Ln. G. Subba Rao and
Secretary Ln. K. Satyanarayan Rao, Gandhiji Institute of Science and Technology, which
we wish to acknowledge and thank from depth of our hearts.

We are very much thankful to Dr. ER.P.SANJEEVA RAYUDU, Ph.D, Principal, Gandhiji
Institute of Science and Technology, Gattu Bhimavaram for his encouragement and good
support.

We are very much thankful to Mr. D.THAKUR , Associate Professor & HOD,
M.Tech (CST)

Department of Computer Science and Engineering for his valuable suggestions

encouragement and good support throughout this project work.

This gives us a great pleasure to extend my sincere heartfelt gratitude to my project Internal
Guide Mr. D.THAKUR M.Tech (CST) , Associate Professor, Department of Computer Science
and Engineering, for helping us in this project and providing useful feedback, suggestions and
corrections and also for sparing his valuable time. He has been a constant source of
encouragement, which kept the project going.

We express my thanks to the entire faculty of Department of Computer Science and

Engineering, Gandhiji Institute of Science and Technology, who have encouraged us
throughout the course of Bachelor’s degree.

M.BINDU (16JF1A0502)
D.TRIVENI (16JF1A0525)
G.KAMALA (16JF1A0510)
B.RAJENDRA (16JF1A0518)
 DECLARATION
This is to certify that the work reported in the present thesis titled “CREDIT CARD FRUAD
DETECTION USING MACHINE LEARNING” is a record of work done by me in the
Department of Computer Science and Engineering, Gandhiji Institute of Science and Technology,
Gattu Bhimavaram.

No part of this project is copied from books, journals, documents or internet and whenever the
portion is started, the same has been duly referred in the text and the entire report work of the
project is done by me, not copied from any other sources.

M.BINDU (16JF1A0502)

D.TRIVENI (16JF1A0525)

G.KAMALA (16JF1A0510)

B.RAJENDRA (16JF1A0518)
 ABSTRACT

Billions of dollars of loss are caused every year by fraudulent credit card transactions.
The design of efficient fraud detection algorithms is key for reducing these losses, and more
and more algorithms rely on advanced machine learning techniques to assist fraud
investigators. The design of fraud detection algorithms is however particularly challenging
due to the non-stationary distribution of the data, the highly unbalanced classes distributions
and the availability of few transactions labeled by fraud investigators. At the same time public
data are scarcely available for confidentiality issues, leaving unanswered many questions
about what is the best strategy. In this thesis we aim to provide some answers by focusing on
crucial issues such as: i) why and how under sampling is useful in the presence of class
imbalance (i.e. frauds are a small percentage of the transactions), ii) how to deal with
unbalanced and evolving data streams (non-stationarity due to fraud evolution and change of
spending behavior), iii) how to assess performances in a way which is relevant for detection
and iv) how to use feedbacks provided by investigators on the fraud alerts generated. Finally,
we design and assess a prototype of a Fraud Detection System able to meet real-world
working conditions and that is able to integrate investigators’ feedback to generate accurate
alerts.
 INDEX
Chapter.No. Page No
 Chapter 1 Introduction................................................................................................................1
Chapter 2 Literature Survey ......................................................................................................3
Chapter 3 System Analysis .........................................................................................................7
3.1. Existing System..........................................................................................................7
3.2. Proposed System ......................................................................................................10
3.3. Feasibility Study ......................................................................................................13
3.4. Effort, Duration, and Cost Estimation using COCOMO Model .............................14
Chapter 4 Software Requirements Specification ....................................................................18
4.1. Purpose, Scope, Definition .......................................................................................18
4.2. Requirement Analysis ..............................................................................................19
4.3. System Requirements ...............................................................................................22
4.4. Software Description................................................................................................22
Chapter 5 System Design ..........................................................................................................25
5.1. System Architecture .................................................................................................25
5.2. Modules ...................................................................................................................26
5.3. Data Flow Diagram .................................................................................................27
5.4. UML Diagrams .......................................................................................................31
5.4.1. Use Case Diagram ...............................................................................................31
5.4.2. Class Diagram .....................................................................................................32
5.4.3. Activity Diagram .................................................................................................33
5.4.4. Sequence Diagram................................................................................................34
Chapter 6 Implementation .......................................................................................................35
6.1. Steps for Implementation...................................................................................................... 35
6.2. Coding.................................................................................................................................. 36
Chapter 7 System Testing ........................................................................................................42
7.1. Testing .....................................................................................................................42
7.2. Black Box Testing ...................................................................................................42
Chapter 8 Screen shots .............................................................................................................45
Chapter 9 Conclusion ................................................................................................................55
Chapter 10 Bibliography ..........................................................................................................56
List of Diagrams
1. System Architecture...................................................................................................................25

2. Use Case Diagram......................................................................................................................31

3. Class Diagram............................................................................................................................32
4. Activity Diagram ......................................................................................................................33

5. Sequence Diagram ....................................................................................................................34