Thanks to innovations in AI and Robotic Process Automation, spotting traditional fraud has become easier and more efficient, but battling first-party fraud is more challenging on multiple fronts. First-party attackers do everything from inflate their income on loan applications to lie about product deliveries. If you host or maintain an e-commerce platform, you’ve likely already made a criminal’s hit list – and that criminal looks just like any other consumer.
Basic identity verification might keep shoppers from abandoning their carts, but it won’t stop first-party fraudsters from exploiting “Item Not Received” refunds and scamming “Buy Now, Pay Later” plans. However, all is not lost. There’s one way to have your ecommerce cake and eat it, too: By integrating first-party fraud protections that are just as quick as they are comprehensive.
Don’t wade into the world of e-commerce unarmed against the waves of first-party fraud. Instead, protect your assets, reputation, and customers with robust, real-time ID verification solutions from EVS. Our fast, highly accurate Blue Assure platform builds layers of safety between fraudsters and your business.
The Rise of First-Party Fraud: A Crime That’s Gaining Speed & Taking Businesses Down
First-party fraud is so difficult to spot because you’re not dealing with bad actors or cyberhackers. “First party” means actual consumers who are using their real identities are intentionally deceiving businesses for personal gain. The effects of fraud on businesses are undeniably damaging, and no one is immune: A 2023 Visa survey explored e-commerce transactions throughout the United Kingdom and found that, in just one fiscal year, an astonishing nine out of 10 small businesses fell victim to first-party fraud.
All e-commerce industries, from clothing retailers and iGaming platforms to fintech corporations and restaurant apps, are susceptible to first-party fraud. Criminals often test new schemes on high-risk financing industries first – these attacks can lead to massive payouts – but as their confidence grows, fraudsters will target other sectors until their method no longer works and they’re forced to create another.
Although the level of first-party fraud exposure your business will receive directly correlates to its number of customer interactions, transaction types, information collected, and internal payment processes, these attacks almost always result in one or more bad outcomes:
Why First-Party Fraud Is Growing
Every brand that sells in the e-commerce space needs to deliver frictionless checkouts. Customers bounce out of carts faster than yellow traffic lights turn red, and many companies mistakenly believe that the only way to hold consumer attention and increase sales is by reducing backend verifications. And we get it! The brand that prioritizes a seamless user experience is rewarded with even more users.
But here’s the problem with that flawed route: The easier it is for shoppers to bypass your e-commerce checkpoints, the more likely they are to see just how much they can get away with. Whether through chargeback fraud, loan stacking, fronting, or false claims of goods lost in transit, an increasing number of customers are turning to first-party fraud, simply because they can.
To protect yourself from this exact scenario, here’s the motto we like to gift our EVS clients: “Frictionless Checkouts = Frictionless Fraud.” If you ever find yourself wanting to cut corners in online payments and sacrifice layers of security, keep this phrase top of mind. It’s more than a helpful perspective shift; it’s your lifeline out of danger, debt, and disaster. Frictionless checkouts without robust ID checks create easy entry points for first-party abuse.
Block Fraud, Not Customers: Combating E-Commerce Fraud With Real-Time ID Verification
Here’s where the rubber meets the digital road. Businesses across every industry need workable solutions to fight first-party fraud without alienating their consumer base, and the only path toward success is by implementing secure online payments through real-time ID verification. EVS has witnessed firsthand how in-the-moment ID checks can effectively mitigate first-party fraud through a combination of robust security measures and customer-centric strategies. More specifically, here’s how to set your business up to successfully mitigate first-party fraud:
- Implement behavioral biometrics to monitor how users interact with devices and detect anomalies in user behavior.
- Integrate advanced AI and real-time ID verification models that can learn from a vast array of data points, identify subtle patterns and correlations that humans and simpler algorithms might miss, and learn over time.
- Apply network analytics to uncover hidden fraud networks and synthetic identity rings that might be hidden from traditional analysis and insights.
- Use natural language processing to parse online communications related to financial transactions and identify inconsistencies or deceptive behaviors.
- Customize an integrated data environment that correlates internal and external data from sources for more holistic risk assessments.
- Depend on real-time ID verification and intervention to proactively stop fraudulent activity.
- Join collaborative fraud information networks to access shared insights about fraud trends and tactics.
- Include regulatory technology to ensure your business is always compliant with current global, federal, state, and industry standards.
Trust EVS for Real-Time ID Verification
Now that you know real-time ID verification is the most effective first-party fraud defense, it’s time to explore how you could implement and maintain these changes without overwhelming your internal fraud team. Payment processors need to layer real-time identity verification, like document and data checks, with behavioral monitoring to stop fraud before it happens – and that’s where EVS comes in. EVS offers proven first-party fraud solutions that are zero-part gimmick and 100% necessary for comprehensive fraud protection.
Our signature Blue Assure platform is an umbrella system that can be tailored to your brand’s needs. Layer our AssureID tool with our AssureLocate product to create a real-time identity and location verification solution that helps identify high-risk customers and transactions, detect and prevent location spoofing, and verify user jurisdiction at the moment of action. Blue Assure is so quick and accurate, your customers won’t even know it’s running in the background to protect their e-commerce transactions from fraud – and criminals won’t be able to hide behind fake locations or exploit jurisdictional loopholes to take advantage of your company.
Take control of your first-party fraud protection by partnering with an industry expert like EVS. We mitigate financial, reputational, and compliance risk so you can focus on the more pressing matters of creating fantastic products and engaging your target customers. Reach out today for a consultation!
