#United States #Socure #Incline Village #First-Party Fraud #Fraud Prevention

Combating a $100 Billion Crisis: Socure's First-Party Fraud Consortium

In a significant development, Socure, a pioneer in artificial intelligence-driven identity verification, has launched its First-Party Fraud Consortium. This initiative aims to confront the escalating problem of first-party fraud, a crime that exploits legitimate identities for financial gain.

As online transactions continue to rise, so do the tactics employed by fraudsters. First-party fraud, often referred to as 'friendly fraud', occurs when individuals use their own identities to dispute legitimate transactions, leading to enormous financial losses. In the U.S. alone, annual losses attributable to first-party fraud exceed a staggering $100 billion.

An Unprecedented Collaboration

The consortium represents a historic first by uniting a diverse array of industry players, including financial institutions, fintech companies, payment platforms, and sports betting providers. This coalition gathers crucial data from over 190 million contributed identities—of which 121 million are unique—and sheds light on 20 billion transactions taken into account. By sharing this intelligence, members can advance their capacity to detect and avert fraud before it becomes entrenched.

Socure's product management head, Ori Snir, emphasizes the consortium's effectiveness: "First-Party Fraud has developed into a $100 billion crisis that conventional methods struggle to address. By merging forces with major players across industries, we can create a formidable network that acts swiftly to delineate fraudulent behaviors."

The consortium has gained traction with founding members that include five of the top ten financial institutions in the U.S. Noteworthy fintech partners such as SoFi, Green Dot, and Dave.com are also contributing vital insights, showcasing a collaborative spirit aimed at eradicating fraud across the financial landscape.

This collective effort is critical as data from Mastercard reveals a sharp spike in chargeback claims, with 238 million incidents globally in 2023 and projections indicating that this could reach 337 million cases by 2026. Such a trend places immense pressure on financial institutions to rethink their anti-fraud strategies.

Key Insights and Benefits

Findings from the consortium reveal a compelling statistic: 77% of member customers maintain overlapping accounts across various institutions. This overlap signifies a pressing need for comprehensive data sharing to detect fraudulent financial activities efficiently. The insights garnered from the consortium will fuel Socure's Sigma First-Party Fraud Solution, which empowers organizations to:

• - Deliver real-time alerts addressing abuse within regulatory frameworks.
• - Identify bad faith disputes before they bear a financial burden.
• - Spot potential payment defaults arising from fraudulent activities.
• - Analyze alternative data not typically tracked in traditional credit reports.

Ultimately, through enhanced collaboration and data holistically shared throughout the industry, the consortium aspires to equip financial ecosystems—ranging from investment platforms and merchants to gaming and telecommunications—with the tools needed to identify and mitigate first-party fraud risks during new account openings, transactions, and dispute resolutions.

About Socure

With an esteemed clientele that encompasses 18 of the top 20 banks, numerous state and federal agencies, and over 500 fintechs, Socure utilizes machine learning and AI to simplify identity verification in both the public and private sectors. Its acquisition of Effectiv underscores its commitment to expanding capabilities in risk management, bringing cutting-edge fraud prevention solutions to its extensive customer base.

As we navigate this digital era marked by increased transaction rates, Socure’s consortium stands out as a beacon of innovation and collaboration in the fight against fraud, setting a new standard for data-driven fraud prevention strategies.