Socure, the provider of digital identity verification and fraud solutions, 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.”
Socure’s front-row seat to the majority of new fintech and financial services application volume and its tight strategic relationships “spanning over 1,800 customers, including 4 of the top 5 financial institutions, 9 of the top 12 card issuers, nearly every major consumer fintech, the largest BNPL provider, the largest HR/payroll service, the largest online gaming operator, the largest delivery marketplace and 4 of the top 5 state governments, puts the company in a unique position to successfully deliver the consortium-based, first-party fraud solution that the market and its partners are demanding.”
The consortium’s founding members “include many of the nation’s largest digital banks and fintechs, including SoFi, Green Dot, Varo, Ingo, and Public, amongst others, totaling over 50 million active accounts across the consortium at launch.”
Additionally, the consortium is actively “working with many of the category defining players to provide insights into account activity – both positive and elevated risk – to quickly add more than 200 million additional active accounts to the network making it the largest of its kind in the industry.
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 U.S. alone totaling more than $100 billion, according to Socure’s 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 behavior over time and across multiple platforms.”
In fraud prevention, large data networks “are essential, and the industry must work together to solve this rapidly growing problem.”
Johnny Ayers, founder and CEO of Socure, said:
“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.”
As noted in the update:
“With over 40% 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.”