Online auctions attract not only legitimate businesses trying to sell their products but also fraudsters wishing to commit fraudulent transactions. Consequently, fraudster detection is crucial to ensure the continued success of online auctions. This paper proposes an approach to detect fraudsters based on the concept of neighbor diversity. The neighbor diversity of an auction account quantifies the diversity of all traders that have transactions with this account. Based on four different features of each trader (i.e., the number of received ratings, the number of cancelled transactions, k-core, and the joined date), four measurements of neighbor diversity are proposed to discern fraudsters from legitimate traders. An experiment is conducted using data gathered from a real world auction website. The results show that, although the use of neighbor diversity on k-core or on the joined date shows little or no improvement in detecting fraudsters, both the neighbor diversity on the number of received ratings and the neighbor diversity on the number of cancelled transactions improve classification accuracy, compared to the state-of-the-art methods that use k-core and center weight.

Online auction websites use a simple reputation system to help their users to evaluate the trustworthiness of sellers and buyers. However, to improve their reputation in the reputation system, fraudulent users can easily deceive the reputation system by creating fake transactions. This inflated-reputation fraud poses a major problem for online auction websites because it can lead legitimate users into scams. Numerous approaches have been proposed in the literature to address this problem, most of which involve using social network analysis (SNA) to derive critical features (e.g., k-core, center weight, and neighbor diversity) for distinguishing fraudsters from legitimate users. This paper discusses the limitations of these SNA features and proposes a class of SNA features referred to as neighbor-driven attributes (NDAs). The NDAs of users are calculated from the features of their neighbors. Because fraudsters require collusive neighbors to provide them with positive ratings in the reputation system, using NDAs can be helpful for detecting fraudsters. Although the idea of NDAs is not entirely new, experimental results on a real-world dataset showed that using NDAs improves classification accuracy compared with state-of-the-art methods that use the k-core, center weight, and neighbor diversity.

Microaggregation refers to partitioning n given records into groups of at least k records each to minimize the sum of the within-group squared error. Because microaggregation is non-deterministic polynomial-time hard for multivariate data, most existing approaches are heuristic based and derive a solution within a reasonable timeframe. We propose an algorithm for refining the solutions generated using the existing microaggregation approaches. The proposed algorithm refines a solution by iteratively either decomposing or shrinking the groups in the solution. Experimental results demonstrated that the proposed algorithm effectively reduces the information loss of a solution.

Inflated reputation fraud is a serious problem in online auction. Recently, the neighbor diversity based on Shannon entropy has been proposed as an effective feature to discern fraudsters from normal users. In the literature, there exist many different methods to quantify diversity. This raises the problem of finding the most suitable method to calculate neighbor diversity for fraudster detection. In this study, we collect four different methods of quantifying diversity, and apply them to calculate neighbor diversity. We then use these various neighbor diversities for fraudster detection. Our experimental results against a dataset collected from a real world auction website show that, although these diversities are calculated differently, their performances on fraudster detection are similar.