Fraud

What is first-party fraud?

Fraud committed by the actual account holder using their own identity (or a manipulated version of it) to deceive a financial institution. Unlike third-party fraud, where a stolen identity is used, first-party fraud involves intentional misrepresentation by the individual themselves—such as providing false income information on a loan application, taking out credit with no intention of repaying, or filing false insurance claims.

How it works

Example: An individual inflates their income on a mortgage application by submitting doctored pay stubs, secures a loan they cannot afford, and defaults after six months.