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

First-party fraud 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.

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.

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.

Bust-out fraud 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.”