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All Journal International Journal of Informatics, Information System and Computer Engineering (INJIISCOM)
Angel Jones
Capitol Technology University, United State of America
Computer Science & IT Electrical & Electronics Engineering Engineering Industrial & Manufacturing Engineering Mechanical Engineering

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Unveiling the Potential of Local Outlier Factor in Credit Card Fraud Detection Angel Jones; Marwan Omar
International Journal of Informatics, Information System and Computer Engineering (INJIISCOM) Vol. 7 No. 1 (2026): INJIISCOM: VOLUME 7, ISSUE 1, JUNE 2026 (ONLINE FIRST)
Publisher : Universitas Komputer Indonesia

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.34010/injiiscom.v7i1.15319

Abstract

This study evaluates the Local Outlier Factor (LOF) algorithm for credit card fraud detection, emphasizing its effectiveness with highly imbalanced datasets. Unlike traditional methods that struggle with the rarity and variability of fraudulent transactions, LOF utilizes local density deviations to identify anomalies. Through a rigorous methodology involving data preprocessing, parameter tuning, and comparative machine learning analysis, LOF demonstrated a high recall rate and a balanced precision-recall trade-off, excelling at detecting subtle, localized fraud. Challenges like threshold setting and false positives were noted, with future research suggested on real-time integration and advanced feature engineering. The study underscores LOF's strengths, contributing to enhanced financial security strategies. 
Co-Authors Marwan Omar