8.13 Enhancing the Data

In addition to transactional variables listed above, demographic information is associated to each customer account in a typical data warehousing technique. Demographic information is associated based on a zip code or a geo code matched against a shopper's physical address. This type of demographic data has typically been used for marketing purposes to segment potential prospects on the basis of their household and neighborhood features. In this situation, however, it is used for the profiling of perpetrators and the detection of criminal activity. Other data points can be included in the development of a fraud-detection model, incorporating additional clickstream information, which, again, is commonly used for marketing purposes but not fraud detection. This clickstream data can be created from such Internet mechanisms as Web bugs, cookies, and Web forms. The demographic data includes some of the following information; the following is a partial listing of over 150 lifestyle variables:

GEOCODE: A location code down to 200 household level
MSA_CODE: Metropolitan statistical area
LATITUDE: Location field
LONGITUDE: Location field
ZIP4: Zip plus four
ACORN: A Classification of Residential Neighborhoods code
POP_CY: 2000 population
AVGHHSIZE: Average household size
P_WHITE_CY: Percent White population
P_AGE25_44: Percent 25-44 population
MED_AGE_CY: Median age — total population
P_COLL_GRD: Percent college graduates
P_MANAGMNT: Percent in managerial positions
P_POVERTY: Percent in poverty level
P_URBAN: Percent urban residences
P_SINGLE: Percent single
P_WOM_LABF: Percent of women in labor force
P_BLT_1980: Percent of buildings built prior to 1980
MEDHOMEVAL: Median home value
MED_RENT: Median rent
P_INC_50: Percent of income $50,000-$75,000
MED_INC: Median income amount
MEDDISPINC: Median disposable income
MEDNETWRTH: Median net worth

These types of demographics can be purchased from a number of companies, including Acxiom, CACI, ChoicePoint, Equifax, Experian, Trans Union, and others, as we discussed in Chapter 2. They can be purchased on a per-record basis, via disk, CD, tape, or in real time through secured networks or via the Web, directly from the companies or through third-party integrators. These demographics can reveal very interesting lifestyle information about on-line shoppers, including those likely to carry out fraud.