A recent MRC webinar featured Chargeflow’s Ben Herut, VP of Risk & Analytics. He shared what he sees across thousands of merchants who are dealing with the steady rise in first party fraud. The session was hosted by the MRC, and the perspective came directly from Chargeflow’s work inside real dispute flows.

‍View the webinar summary here on MRC’s website and the recording.

Why First Party Fraud Is Harder to Catch Than Traditional Fraud

Ben opened with a misconception that still shapes how many merchants think about fraud.

“Seventy five percent of chargebacks today aren’t traditional fraud. They come from real customers using real cards.”

Fraud tools miss these cases because nothing about the transaction looks suspicious. The identity matches. The device looks familiar. No rules fire at checkout.

“Friendly fraud is invisible to most fraud systems. The signals only appear after the transaction.”

‍As VP of Risk & Analytics, Ben explained that the real story only shows up in post-purchase behavior, not at checkout.

What Is Driving the Rise in First Party Fraud

From Ben’s point of view, the increase has little to do with criminals. It comes from customer behavior and internal friction.

“A lot of this isn’t malicious. It’s regret, confusion, frustration, or convenience. Customers choose the bank because it feels easier.”

The main drivers:

• Economic pressure
• Subscription confusion
• Policies that are unclear or buried

Ben illustrated it with a case from the travel space:

“They extended the cancellation window by twenty-four hours, and first party chargebacks dropped by twenty-five percent.”

A small operational change made a measurable difference.

The Real Cost From Ben’s Point of View

Ben pushed merchants to look beyond the lost order. The real impact shows up in inventory loss, support workload, processor friction, and declining approval rates. These are the parts of the business most teams never connect back to first party fraud.

He also explained how issuers interpret volume:

“When a bank sees too many disputes tied to a merchant, they start declining. It’s not personal. It’s volume.”

Most merchants do not see this risk until the damage is already underway.

Early Signals That Point to First Party Abuse

Ben returned to behavior as the strongest indicator. These patterns tend to appear long before a dispute is filed:

• Full product use followed by a dispute
• No support contact at any stage
• A new device fingerprint appearing only at dispute time
• Repeat refund or dispute cycles from the same customer

“If someone uses the product fully and never talks to support, that’s not normal. That’s a story.”

These signals live in merchant systems, not in fraud tools.

What a Clear Rebuttal Looks Like From an Issuer’s Point of View

Ben explained what issuers actually see when reviewing evidence. Most files arrive compressed, so tiny text and cluttered screenshots turn into unreadable images. Cases that should be easy wins get lost because the reviewer cannot see anything.

“Think of a chargeback response like telling a story. Whoever tells the clearer story usually wins.”

From Chargeflow’s perspective, the strongest packages share a pattern:

• Clean timestamps
• Readable proof of delivery or usage
• A short explanation that ties the evidence to the dispute reason
• No padding

This mirrors how issuers evaluate cases and gives them what they need to make a decision.

The Main Takeaway from Chargeflow’s VP of Risk & Analytics

Ben’s closing point was simple: first party fraud follows patterns. Those patterns become clear when teams pay attention to what happens after the purchase. The signals aren’t hidden. They’re just split across fraud, CX, billing, and product. Once those teams share the same view of customer behavior, disputes stop feeling random. Merchants catch issues earlier, close the gaps that create confusion, and win more of the cases that reach the issuer.

For Ben, the shift comes from treating first party fraud as a behavior problem, not a fraud problem. That’s when the fixes become practical and within a merchant’s control.