First-Party Fraud in India: How Bajaj Finserv Is Fighting Back with AI

First-party fraud occurs when an individual deliberately provides false or misleading financial information to gain a financial advantage. This could include lying about income on a loan application, failing to repay loans with no intention of doing so, or committing chargeback fraud by falsely disputing legitimate transactions.

Key characteristics of first-party fraud:

• Intentional misrepresentation: The fraudster knowingly provides inaccurate information.
• No third-party involvement: Unlike identity theft or hacking, first-party fraud is committed by the individual themselves.
• Common targets: Loan applications, credit card transactions, and Buy Now, Pay Later (BNPL) schemes.

For example, an individual might apply for a personal loan by overstating their income or providing fake documents. Once the loan is approved, they may default on repayments, causing financial losses to the lender.

How it differs from third-party fraud

While third-party fraud involves external actors exploiting someone else’s identity or account, first-party fraud is perpetrated by the account holder or applicant. This distinction is crucial because first-party fraud often goes undetected longer, as the perpetrator has legitimate access to the financial account or service.

Bajaj Finserv employs cutting-edge technologies, including Artificial Intelligence (AI) and machine learning, to combat first-party fraud. These tools analyse vast amounts of data to identify patterns and anomalies that signal fraudulent behaviour.

AI-driven fraud detection

AI systems are designed to detect inconsistencies in financial applications and transactional behaviour. For instance:

• Behavioural analysis: AI can flag unusual repayment patterns or discrepancies in income documentation.
• Data cross-verification: The system cross-checks information provided by applicants with external databases to ensure accuracy.
• Real-time alerts: Suspicious activities, such as multiple loan applications in a short span, trigger immediate alerts for further investigation.

Benefits of AI in fraud prevention

• Enhanced accuracy: AI reduces human error by analysing data with precision.
• Faster detection: Real-time monitoring ensures quicker identification of fraudulent activities.
• Data security: Bajaj Finserv’s AI systems are designed to protect user data while ensuring seamless service delivery.

By leveraging these advanced tools, Bajaj Finserv not only safeguards its operations but also protects its customers from potential financial risks.

Pro-tip: Regularly monitor your credit report to spot any discrepancies early. Bajaj Finserv customers can access credit health reports through their account portals. 

If you suspect first-party fraud, it is crucial to act quickly to minimise potential damage. Bajaj Finserv provides several tools to help customers report and address fraud effectively.

Step-by-step guide to reporting fraud:

1. Identify the issue: Review your financial statements and credit reports for any unauthorised or suspicious activity.
2. Contact Bajaj Finserv: Use the fraud reporting portal or chatbot available on the Bajaj Finserv website to report the issue.
3. Provide details: Share all relevant information, such as account numbers, transaction IDs, and supporting documents, to assist the investigation.
4. Secure your accounts: Change passwords and enable two-factor authentication to prevent further unauthorised access.
5. Follow up: Stay in touch with Bajaj Finserv’s customer support team for updates on your case.

Tips to safeguard your accounts:

• Use strong, unique passwords for all financial accounts.
• Regularly update your contact information with Bajaj Finserv to receive timely alerts.
• Avoid sharing sensitive information, such as OTPs or account details, with anyone.

Pro-tip: Bajaj Finserv customers can use the fraud reporting chatbot for quick assistance and guidance on securing their accounts.