fraud detection algorithms

Fraud detection algorithms are tools used to identify unusual patterns or behaviors that suggest fraudulent activities, such as credit card fraud or identity theft. They analyze large sets of data to spot anomalies—like a sudden spike in transactions or purchases from unusual locations. These algorithms often use statistical techniques, machine learning, and rules based on known fraud cases to differentiate between legitimate and suspicious activity. When they detect potential fraud, they flag it for further investigation, helping protect individuals and organizations from financial loss and maintaining the security of transactions.