First-party has emerged as the most prevalent type of fraud worldwide. It accounted for more than a third of all reported fraud cases in 2024—an increase from 15% the year prior.
According to The Calm Before the Storm?, a new study from Lexis-Nexis, this surge places it ahead of other major fraud types, including third-party account takeovers, scams, and true identity theft.
First-party fraud, also known as friendly fraud, occurs consumers dispute legitimate charges, often resulting in a refund. These disputes may involve claims that an unauthorized purchase was made using their account, or that an item was not received or was stolen by a porch pirate. It can also include misrepresenting or providing false personal information for financial gain, such as when applying for a loan.
Factors Behind the Growth
Buy now, pay later transactions—an increasingly popular payment method—have contributed to the rise in first-party fraud, a trend often exacerbated by periods of inflation. Financial institutions are increasingly being held liable for scams, which is also likely influencing the uptick. Additionally, several recent regulations now require victims to be fully reimbursed for all scam-related losses.
“Banks have had somewhat lax stances when it comes to dispute and chargeback policies, making it easier for consumers who get away with friendly fraud,” said Suzanne Sando, Lead Analyst of Fraud Management at Javelin Strategy & Research. “They can claim fraud on smaller purchases here and there without raising any red flags. In order to keep customers happy, banks will approve these chargebacks without nearly enough investigation into the validity of the claim.”
More Common Among Young People
Another reason behind the growth of first-party fraud is that younger consumers are more likely to commit this type of crime. Separate data from Socure found that while 13% of respondents admitted to engaging in friendly fraud, that figure jumps to 40% among Gen Z respondents. As more young consumers enter the economy, first-party fraud is likely to increase.
“There’s an attitude of first-party fraud being a victimless crime, where the only ones who lose are corporate giants that won’t actually feel any effects from the fraud,” Sando said. “Consumers are generally feeling fatigued from the state of the economy, and that leads to what I would consider lax attitudes and moral ambiguity when it comes to committing friendly fraud.”
