Socure consortium hits milestones in tackling First-Party Fraud problem

Heeding the call for more collaboration and joint defense across industries facing a massive increase in identity fraud, Socure has announced “significant milestone achievements” for its First-Party Fraud Consortium.

A release calls the consortium an “unprecedented collaboration,” marking the “first time that major financial institutions, fintechs, payment platforms, sports betting companies, and merchants have united to share data and insights to combat first-party fraud.”

First party fraud refers to when a person or organization uses its own personal identity details to commit a dishonest act for personal or financial gain. Also known as “friendly fraud,” it can mean opening an account with one’s real identity and then using it to commit fraud. In credit terms, it often takes the form of disputing legitimate transactions; this encompasses both intentional and accidental incidents.

Socure says losses from first party fraud in the U.S. alone total more than $100 billion annually, and projections indicate a 42 percent increase to 337 million cases by 2026.

The New York-based identity verification firm says its consortium “seeks to unify companies to tackle the complicated, multi-industry” first-party fraud issue. Its key findings show that, on average, 77 percent of members’ customers have overlapping accounts at two or more institutions in the contributed database.

Sharing data to fight friendly fraud just makes sense

In its efforts, it has thus far amassed “data intelligence encompassing 190 million contributed identities, 121 million of which are unique identities, 325 million accounts, and 20 billion transactions.” Rapid analysis of dispute histories, payment denials, and account closures across platforms help it stop fraud before it happens.

“First-party fraud has evolved into a $100 billion crisis that traditional fraud prevention methods simply cannot address,” says Socure’s Head of Product Management, Fraud & Identity Solutions, Ori Snir.

“By bringing together the industry’s leading financial institutions and platforms, we’ve created an unparalleled network effect that enables us to identify and stop fraudulent behavior before it can take root across multiple platforms.”

Members of the First-Party Fraud Consortium include SoFi, Green Dot, Varo, Ingo, Public.com, Discover and Dave. Its insights are factored into Socure’s Sigma First-Party Fraud product, to help organizations detect bad faith disputes, identify potential payment defaults and otherwise stay on top of first-party fraud in real time.

Article Topics

digital identity  |  first-party fraud  |  fraud prevention  |  identity verification  |  Socure