First-party fraud, where consumers falsely dispute legitimate transactions, is rising sharply and projected to reach 38.2 million cases and $4.8 billion in losses by 2028. Around 10% to 16% of consumers admit to this behavior, driven equally by economic hardship and intent to avoid payment. Financial institutions report that 14% of chargebacks stem from first-party fraud, with operational burdens increasing. Merchants are even more affected, facing 21% of chargebacks from such fraud. Solutions like Visa’s CE3.0 and Mastercard’s First Party Trust show promise, but broader adoption and improved fraud prevention systems are urgently needed.

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