FRACTION: Fraud Explanation Generation via Agentic Graph Context Navigation

Graph fraud explanation generation emerges as an important task, which requires jointly leveraging graph structure and content information to produce human-readable explanations for a given risk label. An intuitive approach is to adapt existing graph-enhanced large language models (LLMs), which inject graph structure into LLMs via graph-conditioned instruction tuning or structure-aware embeddings. However, existing methods face two key challenges in graph fraud explanation generation: a lack of evaluation protocols tailored to explanation quality, and a mismatch between the granularity of graph information they provide and what explanation generation requires. In this paper, we propose FRaud Explanation Generation via Agentic Graph Context NavigaTION (FRACTION), a framework for graph fraud explanation generation. To evaluate explanation quality, we introduce a task-specific rubric that assesses faithfulness, graph grounding, helpfulness, consistency, and conciseness, and validate it against human judgments. To focus on fine-grained details of relevant neighbors without reading the entire neighborhood, we equip a language model with graph tools that progressively disclose neighbor records. To train our graph agent, we propose a rubric-guided trajectory distillation strategy through which the agent learns both tool-use behavior and structured explanation generation. Experimental results on three fraud datasets demonstrate consistent improvements over state-of-the-art baselines under a human-aligned rubric.