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Acquiring labeled datasets often incurs substantial costs primarily due to the requirement of expert human intervention to produce accurate and reliable class labels. In the modern data landscape, an overwhelming proportion of newly generated data is unlabeled. This paradigm is especially evident in domains such as fraud detection and datasets for credit card fraud detection. These types of data have their own difficulties associated with being highly class imbalanced, which poses its own challenges to machine learning and classification. Our research addresses these challenges by extensively evaluating a novel methodology for synthesizing class labels for highly imbalanced credit card fraud data. The methodology uses an autoencoder as its underlying learner to effectively learn from dataset features to produce an error metric for use in creating new binary class labels. The methodology aims to automatically produce new labels with minimal expert input. These class labels are then used to train supervised classifiers for fraud detection. Our empirical results show that the synthesized labels are of high enough quality to produce classifiers that significantly outperform a baseline learner comparison when using area under the precision-recall curve (AUPRC). We also present results of varying levels of positive-labeled instances and their effect on classifier performance. Results show that AUPRC performance improves as more instances are labeled positive and belong to the minority class. Our methodology thereby effectively addresses the concerns of high class imbalance in machine learning by creating new and effective class labels. 

In this work, we use an unsupervised method for generating binary class labels in a novel context to create class labels for Medicare fraud detection. We examine how class imbalance influences the quality of these new labels and how it affects supervised classification. We use four different Medicare Part D fraud detection datasets, with the largest containing over 5 million instances. The other three datasets are sampled from the original dataset. Using Random Under-Sampling (RUS), we subsample from the majority class of the original data to produce three datasets with varying levels of class imbalance. To evaluate the performance of the newly created labels, we train a supervised classifier and evaluate its classification performance and compare it to an unsupervised anomaly detection method as a baseline. Our empirical findings indicate that the generated class labels are of high enough quality and enable effective supervised classifier training for fraud detection. Additionally, supervised classification with the new labels consistently outperforms the baseline used for comparison across all test scenarios. Further more, we observe an inverse relationship between class imbalance in the dataset and classifier performance, with AUPRC scores improving as the training dataset becomes more balanced. This work not only validates the efficacy of the synthesized class labels in labeling Medicare fraud but also shows its robustness across different degrees of class imbalance.