## The global crackdown on first-party fraud: Join the fight, or become the target

One of the biggest fraud threats facing organizations today doesn’t come from criminals hiding behind fake or stolen identities. It comes from real people with bad intentions.

One consumer repeatedly uses AI-generated images or receipts to support false claims. Another stacks loans across multiple lenders in the same week with no intention of repaying. A third deliberately builds a positive payment history, then maxes out every available credit line and disappears.

These aren’t edge cases. They are common [first-party fraud](/content/glossary/first-party-fraud/index.html) behaviors that are happening at scale across every type of institution. And because these bad actors are _real_ people who pass every standard fraud check, they’re free to move from platform to platform and start fresh with a clean slate each time.

According to Socure research, 34% of Americans admit to committing first-party fraud at least once, and 59% of those offenders do it again — simply because they got away with it before.

This was never a problem any single institution could solve alone. Still, leaders are feeling the impact everywhere: growing fraud losses, overwhelmed operations teams, and stalling growth because legitimate customers are caught in friction they didn’t deserve.

The only way to stop it is to bring organizations together and share intelligence. Enter, Socure.

## The First-Party Fraud Intelligence Network Built to Close the Gaps Bad Actors Depend On

The idea of cross-institution data sharing is not new. What has changed is the scale and speed of the modern digital economy, where consumers interact across countless platforms and services while fraudsters increasingly use AI to scale and refine their attacks.

That’s why in 2023, Socure set out to build something fundamentally different: the [industry’s first cross-industry consortium](/content/resources/videos/socure-launches-first-party-fraud-solution-and-consortium/index.html) dedicated to first-party fraud — one designed to connect intelligence across [banks](/content/industries/banking/index.html), [fintechs](/content/industries/fintechs/index.html), BNPL providers, [gaming platforms](/content/industries/gaming/index.html), payment networks, [marketplaces](/content/industries/gig-economy/index.html), and beyond to uncover patterns no single organization could ever see alone.

Since then, the consortium has grown at a pace that reflects just how urgently the industry needed this.

As of today, our data set has amassed 530M+ accounts, 158M+ unique identities, and billions of transactions, with contributors spanning every corner of the digital economy — from the largest financial institutions in the country to leading fintechs, BNPL providers, gaming platforms, eCommerce platforms, and beyond.

## First-Party Fraud Consortium Growth

This unified approach, combined with unprecedented scale, has unlocked something organizations have never had before: the ability to confidently identify bad intent before a loss occurs. Disputes that would have previously been approved due to insufficient information get stopped earlier. Loans that would have defaulted never get funded. Good customers move through faster with less friction. And losses that were once written off as an accepted cost of doing business start disappearing from the books entirely.

The industry showed up because the value is real. And the proof is in what our customers are solving today.

> #### “Socure’s ability to analyze patterns across multiple institutions gives us unprecedented visibility into potential fraud risks, allowing us to better protect our customers and our business.”
> #### — Amanda Goettelman, Chief of Staff, Green Dot

## Cross-industry Intelligence in Action

Members are putting this valuable cross-industry intelligence to work across every stage of the customer lifecycle. Here are a few examples of what that looks like in practice.

### How a BNPL Provider Stopped $21.5M in Bust-Out Fraud

A leading BNPL provider’s historical onboarding outcomes were largely pass/fail. If you cleared the standard checks, you were in. But a growing segment of approved users were passing every check, building a history, and then maxing out their credit and walking away. By the time the loss showed up on the books, there was nothing left to do.

The problem wasn’t their ability to verify an identity. It was that verifying an identity tells you nothing about what that person intends to do with it. And with a pass/fail (real person vs. stolen or fake identity) workflow and no visibility into what those borrowers had been doing at other institutions, there was no way to see the pattern coming.

When Socure analyzed their applicant pool against the consortium, 77% of confirmed [bust-out cases](/content/glossary/bust-out-fraud/index.html) were already visible in the network; real people with documented histories of the same behavior at other institutions. The signal existed, they just had no way to see it.

With that cross-industry visibility, they now had a way to identify bust-out risk earlier in the process and take action before the loss occurred, ultimately saving the BNPL provider ~$21.5M in first-party fraud losses annually.

### How an Investment Reduced Payment Risk while Improving the Customer Experience

For a leading investment platform, the moment an investor linked a bank account was a moment of uncertainty. While most customers were legitimate, the platform had limited visibility into whether a funding account was truly trustworthy or whether a deposit might introduce fraud, payment risk, or compliance exposure. Tightening controls could help reduce risk, but at the cost of adding friction to the onboarding experience. They needed a better way to assess both the account and the intent behind the transaction, without slowing down good investors.

To do that, they layered [Socure’s bank account verification solution](/content/use-cases/bank-account-verification/index.html) with first-party fraud intelligence directly into their existing deposit and withdrawal workflows. [Bank account verification](/content/glossary/bank-account-verification/index.html) would confirm account status and ownership, while [first-party fraud intelligence](/content/products/sigma-first-party-fraud/index.html) surfaced whether the person behind the funding action had a history of abuse elsewhere in the consortium.

The result was more funding actions cleared with confidence, stronger fraud controls around high-risk moments, and a more seamless experience for the investors who deserved it — all with the auditability a regulated platform requires.

### How a Credit Union Optimized their Dispute Claim Operations and Reduced Fraud

For a top-tier credit union, dispute volume had become unmanageable. Claims were piling up faster than staff could review them, manual investigation was eating into operational capacity, and without a way to quickly separate bad-faith claims from legitimate ones, preventable losses were slipping through.

When a member submits a dispute or fraud claim, the clock starts immediately. Reg-E requirements mean provisional credit often has to be issued before anyone has had a chance to properly investigate. Without a way to quickly prioritize, fraud operations teams were reviewing everything manually, and the claims that deserved to be challenged were getting lost in the noise.

By layering first-party fraud intelligence into their dispute review workflow, fraud operations could use consortium insights to evaluate claims as they came in — surfacing whether a member had a history of abuse across other institutions before a decision was made. Case handlers could then focus their attention on the claims that actually warranted a deeper look.

This meant a much faster, smarter dispute process: high-risk claims were prioritized and challenged, legitimate members were resolved quickly, and preventable losses were stopped before they hit the books.

## A United Front Against First-Party Fraud

For the first time, organizations that have historically operated in silos are working collectively against a problem that has never respected institutional boundaries.

The result? Losses that once seemed inevitable are now under control. Dispute queues are shrinking while legitimate claims get resolved more quickly. Good customers are deepening their relationship with your brand and spending more. And every day, the signals available inside the consortium grow richer, more predictive, and harder for bad actors to outrun.

The question is no longer whether this approach works. It is whether your organization is using the available intelligence to stay ahead of this growing problem, or becoming an easy target for bad actors.

Ready to join the movement? [Talk with a first-party fraud expert today →](/content/talk-to-an-expert/index.html).

## Frequently Asked Questions

### What is first-party fraud?

[First-party fraud](/content/glossary/first-party-fraud/index.html) is when a real person uses their own genuine identity to deceive a business for financial gain. Because these bad actors pass standard identity checks, first-party fraud is far harder to detect than traditional identity theft.

### What is a first-party fraud consortium?

A first-party fraud consortium is a network of organizations that share fraud intelligence across institutions to spot repeat bad actors that no single company could see alone. Socure launched the industry’s first cross-industry consortium dedicated to tackling first-party fraud in 2023, spanning banks, fintechs, BNPL, gaming, and more.

### How is first-party fraud different from third-party fraud?

In third-party fraud, a criminal uses someone else’s stolen or synthetic identity. In first-party fraud, the person is exactly who they claim to be — they simply act in bad faith after passing verification, which is why traditional fraud checks alone can’t stop it.

### What is bust-out fraud?

[Bust-out fraud](http://v/?source_page=%2Fblog%2Ffirst-party-fraud-consortium) is a form of first-party fraud where someone builds a positive payment history to earn trust, then suddenly maxes out every available credit line and disappears without repaying. It’s one of the hardest first-party schemes to catch because the account looks legitimate until the “bust-out.”

### Emma Griffin

Emma Griffin is a Product Marketing Lead at Socure, where she owns go-to-market strategy for fraud and risk intelligence solutions. With over a decade of marketing experience, she has built a career on turning complex ideas into clear narratives that resonate with buyers. Before tech, Emma performed as a professional Irish dancer on Broadway and toured internationally with Michael Flatley's Lord of the Dance.