XTN Cognitive Security has been named a key vendor in the newly released Mitigating First-Party Fraud: A Guide to Market Solutions report by Datos Insights. The report offers guidance to companies on how to address first-party fraud and what to consider when choosing a solution.
First-party fraud occurs when perpetrators use their real identity or slightly modified versions of it to commit fraud or evade financial obligations. This is a key difference from third-party fraud, where fraudsters hide behind fake or stolen identities. Within the industry, first-party fraud goes by many names, friendly fraud, first-party misuse, chargeback fraud, and consumer fraud, all describing similar deceptive behaviors, especially in credit and debit card transactions.
Typically, first-party fraud falls into two broad categories. The first, known as Payment Fraud or friendly fraud, involves consumers who complete a payment but later dispute the charge, claiming they never authorized the transaction. This tactic is used to avoid financial responsibility and can occur across various payment methods, including cards, checks, and wire transfers. The second category, referred to as Account Fraud or credit fraud, involves consumers who open accounts or apply for credit with no intention of repaying, essentially defaulting on their obligations from the outset.
This type of fraud most heavily impacts financial institutions, merchants, and fintech companies. While solutions targeting third-party fraud have been established for many years, tools specifically addressing first-party fraud are still emerging, often integrated within broader fraud prevention platforms. First-party fraud is particularly prevalent in the U.S. market, where it is closely linked to card-based transactions, and it is also growing as a concern across Europe.
Industry analysts recognize XTN’s advanced and adaptable approach as a leading solution in this space. By leveraging behavioral biometrics, device fingerprinting, and additional signals that feed into a machine learning-powered risk engine to evaluate potential threats, our platform effectively counters sophisticated fraud schemes while protecting the user experience.
This recognition strengthens our commitment to helping businesses minimize fraud losses, safeguard customer trust, and stay ahead in an evolving digital environment.
*Mitigating First-Party Fraud: A Guide to Market Solutions, Gabrielle Inhofe and Jim Mortensen, May 2025
