First Party Fraud

Conventional fraud, also known as Third Party Fraud, includes Loss/Stolen, Counterfeit, Never Received, Identity Theft and etc. In this type of fraud, the Customer is the victim. Conventional fraud has evolved and as a result new threats have emerged. Due to advances in technology, heightened consumer awareness and today’s regulatory environment has increased the prevalence of First Party Fraud. First Party Fraud is when the business or institution is the victim. In First Party Fraud the “Customer” seeks goods or services with no intention of repayment. Some common examples of First Party Fraud include:


Bust Out

Bust Out

A fraud scheme where the “Customer” intends to maximize the amount of loss to a business; frequently going significantly over the credit limit.

Credit Repair

Credit Repair

“Customer” is intentionally manipulating their credit history in an effort to conceal their previous negative credit rating.

Synthetic Identity

Synthetic Identity

An identity that is fabricated to create a “Customer” leveraging a valid Social Security Number (SSN) and combining it with fictitious Personal Identifying Information (PII). Synthetic Identity Fraud is often confused with Identity Theft however, Identity Theft is when a perpetrator impersonates the victim. Synthetic Identity Fraud is when a fictitious identity is created.


Evolution Of New Threats


With breakthroughs in technology, the level of coordination and sophistication in the fraud realm is unprecedented. Traditional Fraud, otherwise known as Third Party Fraud, has evolved and created a new category commonly referred to as First Party Fraud. These complex schemes are Credit/Fraud hybrids.

Examples of Traditional Fraud include:

  • Lost or Stolen
  • Counterfeit
  • Never Received
  • Card Not Present
  • Identity Theft (Account Take Over and/or Fraud Applications)
  • Family Fraud (Familiar Fraud)

Examples of First Party Fraud include:

  • Credit Bust Out
  • Credit Repair
  • Synthetic Identity


Evolution of New Threats

Third Party schemes have the ability to commit First Party Fraud and
First Party schemes have the ability to commit Third Party Fraud.


These new and evolving trends require fresh thinking and a new approach to traditional screening techniques. This is TRS’s primary area of expertise.


Impacted Industries & Populations


Losses from Credit Bust Out, Synthetic Identities, and Credit Abuse have been estimated in the several billions for the United States and Canada alone but has global implications.

Financial Services
Consumer and Business:  Auto, Credit Card, Merchant Processors,
Mortgage, and Retail

Government Services
IRS, SSA, GSA, Medicare/Medicaid, Fannie Mae, HUD,  AAMVA, etc.

Insurance Industry
Auto, Medical, and Personal Liability Providers

Vulnerable Populations
Minors, Senior Citizens, and Indigent Populations

Group Purchasing Organizations (GPO’s), Healthcare Providers,
Hospitals, Pharmaceuticals Companies, etc.


Implications of New Risks

Implications Of New Risks


Broad impact across business dimensions

In today’s heightened regulatory environment where many organizations are required to protect against Money Laundering and Know Their Customer, our solutions provide enhanced safeguards against fraudulent activities that can threaten an organization’s reputation, impact operations, and reduce revenue.