Spectrum-Constrained and Skip-Enhanced Graph Fraud Detection: Addressing Heterophily in Fraud Detection with Spectral and Spatial Modeling

Abstract

Fraud detection in large-scale graphs presents significant challenges, especially in heterophilic graphs where linked nodes often belong to dissimilar classes or exhibit contrasting attributes. These asymmetric interactions, combined with class imbalance and limited labeled data, make it difficult to fully leverage node labels in semi-supervised learning frameworks. This study aims to address these challenges by proposing a novel framework, Spectrum-Constrained and Skip-Enhanced Graph Fraud Detection (SCSE-GFD), designed specifically for fraud detection in heterophilic graphs. The primary objective is to enhance fraud detection performance while maintaining computational efficiency. SCSE-GFD integrates several key components to improve performance. It employs adaptive polynomial convolution to capture multi-frequency signals and utilizes relation-specific spectral filtering to accommodate both homophilic and heterophilic structures. Additionally, a relation-aware mechanism is incorporated to differentiate between edge types, which enhances feature propagation across diverse graph connections. To address the issue of over-smoothing, skip connections are used to preserve both low- and high-level node representations. Furthermore, supervised edge classification is used to improve the structural understanding of the graph. Extensive experiments on real-world datasets, including Amazon and YelpChi, demonstrate SCSE-GFD’s effectiveness. The framework achieved state-of-the-art AUC scores of 96.21% on Amazon and 90.58% on YelpChi, significantly outperforming existing models. These results validate SCSE-GFD’s ability to improve fraud detection accuracy while maintaining efficiency.