Predicting Fraud Victimization Using Classical Machine Learning
Bibliographic record
Abstract
Protecting financial consumers from investment fraud has been a recurring problem in Canada. The purpose of this paper is to predict the demographic characteristics of investors who are likely to be victims of investment fraud. Data for this paper came from the Investment Industry Regulatory Organization of Canada's (IIROC) database between January of 2009 and December of 2019. In total, 4575 investors were coded as victims of investment fraud. The study employed a machine-learning algorithm to predict the probability of fraud victimization. The machine learning model deployed in this paper predicted the typical demographic profile of fraud victims as investors who classify as female, have poor financial knowledge, know the advisor from the past, and are retired. Investors who are characterized as having limited financial literacy but a long-time relationship with their advisor have reduced probabilities of being victimized. However, male investors with low or moderate-level investment knowledge were more likely to be preyed upon by their investment advisors. While not statistically significant, older adults, in general, are at greater risk of being victimized. The findings from this paper can be used by Canadian self-regulatory organizations and securities commissions to inform their investors' protection mandates.
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How this classification was reachedexpand
Full frame machine prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. The Gemma side is a direct model label for every work in the frame, read from the title-only record. The Codex side is a classifier learned from the 10,348 direct Codex labels and calibrated to design-weighted sample rates; fields without enough sample support carry no Codex call. Candidate is the union of the two sides; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels.
Distilled classifier scores by category (both heads)
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.001 | 0.009 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.000 | 0.000 |
| Bibliometrics | 0.003 | 0.002 |
| Science and technology studies | 0.001 | 0.001 |
| Scholarly communication | 0.001 | 0.001 |
| Open science | 0.001 | 0.001 |
| Research integrity | 0.001 | 0.001 |
| Insufficient payload (model declined to judge) | 0.001 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one source (direct Gemma or distilled Codex), not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".