Oct 3, 2026 · 7 min · 8 segments
When you get hit by a fraud attack, the second question should be what kind of fraud am I actually dealing with. First party fraud vs third party fraud isn’t just a technical distinction. It…
Chen ZamirHost
Third-party fraud happens when someone steals payment methods or identities or creates completely new but fake synthetic identities with the intention to defraud your business.
First-party fraud happens when real customers use their real identities but have no intention of honoring their commitments.
They are who they say they are, but their intentions are fraudulent, whether they commit chargeback fraud, returns fraud, trauma abuse, or any other form of policy abuse.
Sounds simple on paper, right? The problem is that in the real world, the lines get blurry fast.
After years of working with fraud teams across dozens of fintechs, I've noticed distinct patterns that separate these fraud types.
So let's talk about what you should be looking for starting with first party fraud.
Fraud cases that are notably not connected by online assets, device IDs or IP networks.
Higher transaction velocity is also often the only suspicious signal and established account history with no ATO indicators.
Now, to be clear, I don't mean that you need to see all of these signals in the same account to say it's first party fraud.
Third-party fraud happens when someone steals payment methods or identities or creates completely new but fake synthetic identities with the intention to defraud your business.
First-party fraud happens when real customers use their real identities but have no intention of honoring their commitments.
They are who they say they are, but their intentions are fraudulent, whether they commit chargeback fraud, returns fraud, trauma abuse, or any other form of policy abuse.
Sounds simple on paper, right? The problem is that in the real world, the lines get blurry fast.
After years of working with fraud teams across dozens of fintechs, I've noticed distinct patterns that separate these fraud types.
So let's talk about what you should be looking for starting with first party fraud.
Fraud cases that are notably not connected by online assets, device IDs or IP networks.
Higher transaction velocity is also often the only suspicious signal and established account history with no ATO indicators.
Now, to be clear, I don't mean that you need to see all of these signals in the same account to say it's first party fraud.
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