Socure launches first-party fraud solution and First-Party Fraud Consortium
- Monday, October 23rd, 2023
- Share this article:
Socure, which provides digital identity verification and fraud solutions, has introduced its first-party fraud solution, Sigma First-Party Fraud, powered by the concurrent launch of its First-Party Fraud Consortium (FPFC). The consortium is unifying companies to tackle the complicated, multi-industry issue of first-party fraud by pooling data and insights, which allow its partners to detect and prevent fraud before it takes hold.
The consortium’s founding members include several digital banks and fintechs, including SoFi, Green Dot, Varo, Ingo and Public, totalling over 50m active accounts across the consortium at launch. Additionally, the consortium is actively working with many players to provide insights into account activity – both positive and elevated risk – to quickly add more than 200m additional active accounts to the network.
First-party fraud is committed by individuals who use their own identity to perpetrate dishonest acts for financial gain. The use of their own identities – with accurate credentials – makes first-party fraud much harder to prevent than identity fraud associated with stolen, manipulated or fabricated synthetic identities. These fraudsters are succeeding to the tune of billions of dollars, with annual first-party fraud losses in the US alone totalling more than $100 billion, according to Socure’s own research.
Detecting and preventing first-party fraud requires rapid analysis of alternative data signals that aren’t tracked in traditional credit reports to discern patterns of fraudulent, deceitful behaviour over time and across multiple platforms.
“First-party fraud can be hard to spot and even seem accidental in many cases, which has invited fraudsters to take advantage of this confusion to the tune of billions of dollars each year,” said Johnny Ayers, Founder and CEO of Socure. “With over 40 per cent of fraudsters planning to commit first-party fraud again less than 60 days after their first fraudulent event – and generally facing zero repercussions from law enforcement – it’s no wonder we’ve seen overwhelming demand for the consortium solution like we are launching today. First-party fraud not only unnecessarily drives up costs of goods for the average consumer, but can also quickly escalate to involve money mules, many of which funnel money directly to larger criminal organizations. We designed the industry’s first holistic first-party fraud solution with many of our strategic partners to break down data silos and bring together top industry players to thwart repeat first-party fraud abusers in their tracks.”
On average, 45 per cent of FPFC members have overlapping consumer bases, making collaborative data sharing all the more valuable to identify fraudulent behavioural patterns that may have otherwise been mistaken as legitimate if not for the identification of repeat first-party fraud abusers across providers. Socure’s first-party fraud solution analyzes data from the FPFC in addition to risk indicators derived from the company’s Socure Risk Insights Network, which sees feedback data from 1,800+ customers across the digital economy. Socure also draws on more than 400 databases of cross-industry ID data, totalling hundreds of millions of transactions across geographies and companies of all sizes to provide identity matching across the Socure FPFC to stop fraud before it spreads.