Instant Fraud Detection for Claim Texts

Detecting fraud in a single email, claim form, or chat log can feel like searching for a needle in a haystack. Investigators need a reliable way to surface the risky language — fast, accurate, and with a clear audit trail. This workflow gives you exactly that, turning raw text into a concise, action‑ready report.

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Fraud Detection in Textual Data

1. Overview

This process examines a single piece of unstructured text (e.g., a claim description, email thread, or chat log) to find statements that may indicate fraudulent activity. It produces a concise report that highlights any suspicious statements, explains why they were flagged, assigns a confidence level, and recommends next steps for a fraud investigator.

2. Business Value

Reduces loss: Early identification of potential fraud helps the organization stop fraudulent claims before they are paid.
Improves efficiency: Provides investigators with a clear, prioritized list of suspicious items, allowing faster decision‑making.
Supports compliance: Documents the rationale for each flagged statement, useful for audits and regulatory reporting.
Protects customers: Helps prevent fraudulent transactions that could damage brand reputation.

3. Operational Context

When it runs: Whenever a new claim, transaction description, or communication is received and requires fraud review.
Who uses it: Fraud investigators and senior fraud analysts.
Frequency: Typically invoked per case, as part of the initial triage of each new claim or transaction narrative.

4. Inputs

Textual Document (the claim or transaction narrative)

Name/Label: Claim Text Document
Type: PDF file containing the unstructured text.
Details Provided: The full text of the claim, email, chat log, or any other unstructured document that may contain fraudulent statements.

Case Metadata

Name/Label: Case Metadata
Type: List of key fields that identify the case.
Details Provided: The following items must be supplied for each run:

Field	Description	Example
Case Reference	A human‑readable identifier for the case (e.g., “FRAUD‑2023‑0012”).	FRAUD‑2023‑0012
Document Source	The origin of the document (e.g., “Customer Email”, “Online Form”).	Email
Date Received	The date the document was received (MM/DD/YYYY).	06/12/2023
Submitted By	Name or role of the person submitting the document.	John Doe – Customer Service

All inputs must be present and the PDF must be readable. If any field is missing, the process stops and the case is flagged for manual review.

5. Outputs

Fraud Findings Report

Name/Label: Fraud Findings Report
Contents:
1. Executive Summary – A brief paragraph stating the number of possible fraud items found (or “No issues identified”).
2. Detailed Findings – A table of flagged statements (see “Flagged Statements Table”).
3. Recommended Actions – Suggested next steps for each flagged item (e.g., “Escalate to senior investigator”, “Request additional documentation”).
Formatting Rules:
- Use plain language.
- The “Detailed Findings” section must be a table with the columns described below.
- The report is plain text; no files are generated.

Flagged Statements Table

Name/Label: Flagged Statements Table (part of the report)
Contents: Each row describes a single flagged statement.
Formatting Rules: The table has the following columns:

Column	Description
Statement ID	Sequential number (1, 2, 3…) for reference.
Extracted Text	The exact sentence or phrase from the document that triggered the flag, trimmed to 200 characters maximum.
Indicator(s)	One or more fraud indicators (from Appendix C) that matched the text.
Confidence	High, Medium, or Low, based on the number and risk level of matched indicators.
Recommended Action	The recommended next step (e.g., “Escalate”, “Review”, “No action”).

6. Detailed Plan & Execution Steps

Gather Inputs – Receive the Claim Text Document (PDF) and the accompanying Case Metadata.
Verify PDF – Confirm that the PDF can be opened and text can be extracted. If not, flag the case for manual review.
Extract Text – Use a text‑extraction method to obtain the raw, readable text from the PDF.
Split into Statements – Break the raw text into individual sentences or logical statements.
Load Fraud Indicators – Refer to the “Fraud Indicator List” (Appendix C). Each indicator has an assigned Risk Level (High, Medium, Low).
Match Statements – For each statement, check for the presence of any indicator phrase (case‑insensitive).
- If a statement contains one or more indicators: record the statement, the matched indicator(s), and their risk levels.
Assign Confidence –
- High: The statement contains ≥ 2 High‑Risk indicators or a single High‑Risk indicator combined with any Medium‑Risk indicator.
- Medium: The statement contains 1 High‑Risk indicator or ≥ 2 Medium‑Risk indicators.
- Low: The statement contains only 1 Medium‑Risk or only Low‑Risk indicators.
Determine Recommended Action –
- High → “Escalate to senior investigator.”
- Medium → “Review with senior analyst; request additional documentation if needed.”
- Low → “Log for monitoring; no immediate action.”
Compose the Report –
- Write an Executive Summary stating the total number of flagged statements and the overall risk level (e.g., “2 potential fraud items identified – high confidence”).
- Populate the Flagged Statements Table with the details from step 7‑8.
- Add a Recommended Action section summarizing the next steps for the case.
Output Report – Deliver the Fraud Findings Report as plain‑text output.

If no statements match any indicators, produce a report with an Executive Summary that states “No potential fraud identified.” No table is required in this case.

7. Validation & Quality Checks

PDF Readability: Ensure the PDF can be read and text extracted. Failure → flag for manual review.
Metadata completeness: All fields in the Case Metadata table must be present. Missing field → flag for manual review.
Indicator Match: Each flagged row must list at least one indicator from Appendix C.
Confidence Calculation: Verify that the confidence level follows the rule in step 8.
Report Completeness: The final report must contain (a) executive summary, (b) flagged statements table (if any), and (c) recommended actions.
Spelling & Grammar: The report should be free of spelling or grammatical errors.

8. Special Rules / Edge Cases

Situation	Handling
No extractable text (e.g., scanned image)	Flag the case for manual review; note “Unable to extract text.”
Missing metadata	Stop processing; generate a “Missing metadata – manual review required” notice.
Document contains no indicators	Produce a “No potential fraud identified” report with a brief summary.
Multiple conflicting indicators (e.g., both high‑risk and low‑risk in same sentence)	Assign the higher risk level; apply the highest‑risk confidence rule.
Extremely long document (more than 500 statements)	Recommend splitting the document and processing each part separately.
Non‑English text	If the text is not in English, flag for manual review or translation before processing.
Unrecognised language or symbols	Flag for manual review; indicate “Unrecognised content.”
If confidence cannot be determined (e.g., no risk level assigned)	Set confidence to Low and recommend “Further review needed.”
If the output report is required for a regulator	Include a note: “Report generated in accordance with internal fraud detection SOP.”

9. Example

Input (provided by the investigator)

Case Reference: FRAUD‑2023‑0012
Document Source: Customer Email
Date Received: 06/12/2023
Submitted By: Jane Smith – Customer Service

Attached PDF (excerpt):

“Hello, I see a charge of $2,500 on my account that I did not authorize. I never received any product for this amount. I have been asked to provide my account password to confirm the transaction. Please refund this amount immediately.”

Expected Output (Fraud Findings Report)

Executive Summary

Two potential fraud items identified – one high‑confidence unauthorized transaction, one high‑confidence credential request.

Flagged Statements Table

Statement ID	Extracted Text	Indicator(s)	Confidence	Recommended Action
1	“I see a charge of $2,500 on my account that I did not authorize.”	Unauthorized transaction (High)	High	Escalate to senior investigator.
2	“I have been asked to provide my account password to confirm the transaction.”	Request for password (High)	High	Escalate to senior investigator.

Recommended Action

Both items require immediate escalation to the senior fraud analyst for further investigation and possible reversal of the transaction.

Appendix A – FAQ

What types of documents can I use?
- Only PDF files containing readable, selectable text (e.g., email, chat logs, claim forms). Scanned images are not supported.
What if the document is in a language other than English?
- The process only scans for English‑language indicators. If the document is in another language, the case must be translated or flagged for manual review.
Can I run this SOP on multiple documents at once?
- This SOP is designed for a single case. To process multiple documents, repeat the process for each document separately.
What if the confidence level is unclear?
- Default to Low confidence and recommend “Further review needed.”
How are “high”, “medium”, and “low” confidence defined?
- High: Strong evidence (multiple high‑risk indicators) or a single high‑risk indicator with a supporting medium‑risk indicator.
- Medium: One high‑risk or multiple medium‑risk indicators, but not enough for High.
- Low: Only low‑risk or a single medium‑risk indicator with no supporting high‑risk indicators.
What if no indicators are found?
- A “No potential fraud identified” report is generated, summarizing that the review found no suspicious statements.
What should I do if the PDF cannot be opened?
- Flag the case for manual review and note the issue.
How often should I run this SOP?
- Each time a new claim or transaction narrative is received that requires fraud analysis.
Is the report legally binding?
- The report is an internal investigative tool; it does not constitute legal judgment.
Where can I find the list of indicators?
- See Appendix C – Fraud Indicator List.

Appendix B – Glossary

Term	Definition
Fraud Indicator	A phrase or pattern that historically suggests fraudulent behavior (e.g., “unauthorized transaction”, “request for password”).
High‑Risk Indicator	An indicator that strongly suggests fraud (e.g., “large transfer without prior approval”).
Medium‑Risk Indicator	An indicator that may indicate fraud but requires additional context (e.g., “unusual location”).
Low‑Risk Indicator	A weaker indicator that may be benign (e.g., “minor discrepancy”).
Statement	A complete sentence or phrase extracted from the source document.
Confidence	The level of certainty (High, Medium, Low) that a statement is fraudulent, based on the number and risk level of matched indicators.
Case Reference	A human‑readable identifier for a particular investigation or claim.
Escalate	The action of moving the case to a higher level of review (e.g., senior fraud investigator).
Executive Summary	A brief paragraph that provides an overview of the findings.
Flagged Statement	A statement that matched one or more fraud indicators and is therefore highlighted for review.
Recommended Action	The suggested next step for a flagged statement (e.g., “Escalate”, “Review”, “No action”).
PDF	Portable Document Format – the file format used for the source text.
Metadata	Information that describes the case (e.g., case reference, source, date).
Triage	The process of prioritizing cases based on risk.
Audit	A systematic review of records to ensure compliance and accuracy.

Appendix C – Fraud Indicator List

Instructions: The list below contains common phrases, patterns, and keywords that suggest fraud. Each entry includes a Risk Level (High, Medium, Low) and an example of usage. When reviewing a statement, look for exact or close matches to any of these items.

Indicator	Risk Level	Example Phrase(s)
Unauthorized Transaction	High	“unauthorized transaction”, “I didn’t authorize this payment”, “unauthorized charge”, “unknown charge”, “unknown transaction”
Large Amount	High	“$5,000”, “$10,000”, “large sum”, “big amount”, “high amount”
Urgent Payment Request	High	“please transfer immediately”, “urgent transfer”, “need the funds now”, “quickly send the money”
Request for Credential	High	“provide your password”, “share your login credentials”, “send me your PIN”, “give me your password”, “need your security code”
Account Takeover	High	“my account was hacked”, “my account is compromised”, “someone accessed my account”, “account takeover”
Fake Identity	High	“my name is”, “I’m [fake name]”, “I am [name] and I’m not an authorized user”, “impersonating”
Fake Documents	High	“attached fake invoice”, “false documentation”, “fake receipt”, “document is forged”, “counterfeit”
Unusual Location	Medium	“my account was accessed from”, “location mismatch”, “different city”, “outside of country”, “IP address”
Multiple Claims	Medium	“multiple claims”, “several requests”, “multiple submissions”, “repeat claims”
Fee Dispute	Medium	“unknown fee”, “unusual fee”, “unexpected charge”, “hidden fee”, “extra fee”
Suspicious Email	Medium	“phishing”, “spam email”, “unknown sender”, “unknown email”, “suspicious email”
Lost or Stolen Item	Medium	“lost my phone”, “stolen credit card”, “missing device”, “lost device”, “my wallet was stolen”
Reimbursement Request	Medium	“refund”, “reimburse”, “compensation”, “payment back”, “return the money”
Change of Account Details	Medium	“change my email”, “update my contact info”, “update my address”, “change my phone number”, “update account details”
Payment Method Change	Medium	“switch payment method”, “use a different card”, “use new bank account”, “change to new bank”
Unusual Time	Low	“late night”, “at 2:00 AM”, “outside business hours”, “late hour”
Inconsistent Information	Low	“different name”, “different address”, “mismatch details”, “conflicting information”
Cyclical Requests	Low	“again and again”, “repeatedly asking”, “multiple requests for same thing”, “repeat request”
Third‑Party Involvement	Medium	“third party”, “someone else”, “another person”, “my friend”, “a colleague”, “a family member”
Money Laundering Terms	High	“money laundering”, “shell account”, “offshore account”, “illegal funds”, “suspicious transaction”
Refund Scam	High	“refund scam”, “false refund”, “scam refund”, “phishing refund”
Phishing	High	“phishing”, “phishing attempt”, “phishing email”, “phishing link”, “phishing site”
Duplicate Payment	Medium	“duplicate payment”, “double charge”, “charged twice”, “duplicate charge”
Unverified Account	Medium	“unverified account”, “unverified user”, “no verification”
Unusual Device	Low	“new device”, “unknown device”, “unknown device”, “new phone”
Identity Verification	Medium	“verify my identity”, “identity verification”, “confirm identity”, “need ID”
Surcharge	Low	“extra charge”, “surcharge”, “additional fee”, “extra fee”
Unusual Currency	Medium	“foreign currency”, “exchanged currency”, “different currency”, “currency conversion”
Unknown Recipient	Medium	“unknown recipient”, “unknown payee”, “unknown beneficiary”, “unknown recipient”
Wrong Account	Medium	“wrong account”, “incorrect account”, “misdirected payment”, “sent to wrong account”
Payment Cancellation	Medium	“cancel payment”, “stop payment”, “stop transaction”, “halt transfer”
Refund Request	Medium	“request refund”, “refund request”, “request reimbursement”, “request payment back”
Payment Authorization	Medium	“authorize payment”, “authorization for payment”, “auth for payment”
Suspicious Activity	High	“suspicious activity”, “unusual activity”, “strange activity”, “suspicious behavior”
Password Reset	Medium	“reset password”, “reset my password”, “password reset”, “reset my login”
Unverified Payment	Medium	“unverified payment”, “unverified transaction”, “unverified transfer”
Foreign Transaction	Medium	“foreign transaction”, “international transaction”, “cross‑border payment”, “foreign payment”
Disputed Transaction	Medium	“dispute this transaction”, “disputed charge”, “disputed payment”, “dispute charge”
Suspicious Link	High	“suspicious link”, “malicious link”, “click this link”, “click here”
Payment Confirmation	Low	“confirm payment”, “confirmation of payment”, “payment confirmation”, “verify payment”

How to Use This List:

Scan each sentence of the text for any of the phrases above.
If a phrase matches, note the indicator and its Risk Level.
If multiple phrases appear in a single sentence, combine their risk levels as per the confidence‑assignment rules (see Step 8 of the plan).

Additional Notes

Consistency is key: Use the same phrasing and structure for each case to ensure easy review and auditability.
Document everything: If a case is flagged for manual review, record the reason (e.g., “Missing PDF,” “Metadata missing”) in a separate log.
Continuous improvement: Periodically review the “Fraud Indicator List” and update it as new fraud patterns are identified. This SOP does not cover the process of updating the list; it is assumed that the list in Appendix C is maintained by the fraud operations team.
No external data: All analysis must be performed only on the provided PDF and metadata; no outside data sources may be accessed during the process.

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The Pressure of Finding Fraud Early

Every undiscovered fraudulent claim erodes the bottom line, strains compliance resources, and harms the trust customers place in your brand. Manual triage often means reading page after page, marking potential red flags, and then drafting justification for each decision. That process is time‑consuming, prone to human error, and creates gaps in documentation that regulators may later scrutinize.

From Unstructured Text to Actionable Insight

The Logic workflow applies a large language model to each incoming document:

Extract the readable text from the PDF.
Segment the narrative into individual statements.
Match each statement against a curated list of fraud indicators, each tagged with a risk level.
Score confidence (high, medium, low) based on the combination of indicator risk levels.
Recommend the next step—escalate, review, or monitor—directly in the report.

The result is a plain‑text report that reads like a senior analyst’s briefing, complete with an executive summary and a structured table of flagged statements.

Sample Findings Report

Below is a representative layout of the “Flagged Statements Table” that appears in every output. The table is automatically populated for each case, so investigators can jump straight to the statements that need attention.

Statement ID	Extracted Text	Indicator(s)	Confidence	Recommended Action
1	“I see a charge of $2,500 on my account that I did not authorize.”	Unauthorized transaction (High)	High	Escalate to senior investigator
2	“I have been asked to provide my password to confirm the transaction.”	Request for credential (High)	High	Escalate to senior investigator

The executive summary that precedes the table will state the total number of flagged items and their overall risk level, giving senior staff a quick pulse on the case.

Why This Workflow Benefits Your Team

Reduces loss – early identification stops fraudulent payouts before they happen.

Accelerates decision‑making – investigators see a prioritized list instead of scanning the whole document.

Strengthens compliance – every flagged statement includes the indicator and confidence level, creating a clear audit trail.

Protects customers – swift action prevents further misuse of accounts and preserves brand reputation.

Insight

Key Insight
By embedding the indicator list directly into the analysis engine, the workflow adapts to new fraud patterns without requiring investigators to memorize ever‑changing keyword sets. The confidence rules ensure that a single high‑risk phrase triggers a high‑confidence flag, while multiple medium‑risk cues are still surfaced for review.

A Trusted Partner in Your Fraud Operations

Logic’s expertise in natural‑language processing means the model understands the nuances of claim narratives, not just keyword matches. The workflow is designed to integrate seamlessly into existing case‑management systems, letting your team focus on judgment rather than data wrangling. With a consistent report format, senior analysts can compare findings across cases, and auditors receive the documentation they need without extra effort.

When every claim is screened through this workflow, your fraud investigators gain a reliable ally that amplifies their expertise, safeguards revenue, and upholds the trust customers expect.

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