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In this paper we describe a fraud detection clustering algorithm applied to the telecom industry. This is an ongoing work that is being developed in collaboration with a leading telecom operator. The choice of clustering algorithms is justified by the need of identifying clients’ abnormal behaviors through the analysis of huge amounts of data. We propose a novel bi-level clustering methodology, where the first level is concerned with the clustering of transactional data and the second level gathers data from the first phase, along with other information, to build high-level clusters.

BI-LEVEL CLUSTERING IN TELECOMMUNICATION FRAUD