This episode tackles the pervasive issue of first-party fraud, where genuine customers exploit dispute processes for financial gain, costing companies millions. It highlights how traditional fraud detection tools fail here and emphasizes the need for a balanced approach that differentiates truth-tellers from fraudsters to maintain customer loyalty and reduce significant financial losses. The discussion reveals the increasing sophistication of consumers using online communities to share methods for filing fraudulent disputes.
Key takeaways
Traditional fraud tools are ineffective against first-party fraud because the perpetrators are legitimate, authenticated customers; new approaches are needed to identify their deceptive behaviors.
Poor dispute resolution experiences are a major driver of customer churn, even more so than account acquisition, highlighting the importance of efficient and fair dispute processes for customer retention.
Many financial institutions outsource dispute resolution, leading to prolonged resolution times and customer dissatisfaction; bringing this function in-house with adequate tools can dramatically improve outcomes and employee morale.
The rise of online communities teaching people how to file fraudulent disputes indicates a societal shift where some consumers feel entitled to exploit businesses, necessitating more robust and intelligent fraud prevention strategies.
Prioritizing the initial intake process of disputes and empowering frontline staff with advanced tools to quickly discern legitimate claims from fraudulent ones can improve both customer experience and financial outcomes.
Commerce Ventures Partner Vivek Krishnamurthy sits down with Shanthi Shanmugam, Co-Founder and CEO of Casap, to unpack one of the most misunderstood problems in financial services: first-party fraud. They dig into what happens when fully KYC’d, “known” customers start using their bank like a universal refund center—filing disputes on flights, Airbnbs, subscriptions, and even dry burgers—and why traditional fraud tools, built for account takeover and identity risk, completely miss this growing loss category. Shanthi shares how her time at Robinhood and her co-founder’s experience at Chime exposed the long tail of messy disputes: 90-day investigations, clawbacks that surprise customers, and support teams burned out enough to take the problem to couples therapy. That experience led to Casap, which helps institutions instantly resolve disputes for “truth-tellers,” identify first-party fraud in real time, and turn a painful operational function into a retention lever—cutting fraud losses by over 50% while improving NPS. They also look ahead to consortium data, risk scores that travel across the ecosystem, and what happens to liability in an “agentic payments” future where AI helps consumers spend.
What does this episode say about finance & fundraising?
Traditional fraud tools are ineffective against first-party fraud because the perpetrators are legitimate, authenticated customers; new approaches are needed to identify their deceptive behaviors.
What does this episode say about customer retention?
Poor dispute resolution experiences are a major driver of customer churn, even more so than account acquisition, highlighting the importance of efficient and fair dispute processes for customer retention.
What does this episode say about ai & automation?
Many financial institutions outsource dispute resolution, leading to prolonged resolution times and customer dissatisfaction; bringing this function in-house with adequate tools can dramatically improve outcomes and employee morale.
What does this episode say about finance & fundraising?
The rise of online communities teaching people how to file fraudulent disputes indicates a societal shift where some consumers feel entitled to exploit businesses, necessitating more robust and intelligent fraud prevention strategies.
What does this episode say about finance & fundraising?
Prioritizing the initial intake process of disputes and empowering frontline staff with advanced tools to quickly discern legitimate claims from fraudulent ones can improve both customer experience and financial outcomes.
