Published Date : 7/31/2025Â
Socure, a leading digital identity verification firm, has released a new anti-fraud product that specifically targets dispute abuse. The risk assessment tool is designed to identify consumers who falsely dispute legitimate transactions for goods and services, helping businesses prevent financial losses by analyzing data from over 350 million identities and nearly 30 billion transactions.
Dispute abuse, also known as Reg-E policy abuse, is becoming a serious issue, costing U.S. businesses tens of billions of dollars annually. According to Socure, approximately 40 percent of all consumers had at least one disputed transaction within the last 24 months, while 15 percent of consumers who disputed a transaction have done so at two or more institutions within 12 months.
“Dispute and Reg-E abuse have historically been two of the hardest forms of first-party fraud to detect, with bad actors hiding behind clean or slightly manipulated identities to exploit consumer protections,” says Johnny Ayers, Socure CEO and founder. “Our new Dispute Abuse Score is a game-changer in this space, providing businesses with the tools they need to identify and mitigate these risks.”
The Dispute Abuse Score analyzes various factors, including dispute histories, account closures, payment denials, geolocation, and device information. This comprehensive analysis allows businesses to identify repeat abusers and take appropriate action. The tool helps companies by auto-approving low-risk disputes and rejecting high-risk transactions to prevent losses. Bad actors are deterred by requiring additional verification, while the platform also adjusts fund availability or hold times for high-risk users.
Socure has been at the forefront of highlighting the risks of identity fraud in various sectors, including government programs. Earlier this month, the New York-headquartered company also launched a workforce verification solution designed to detect fraud during employee recruitment. This tool analyzes phone, email, device, geolocation, behavior, and education signals to flag suspicious applicants, who are then directed to stepped-up document and biometric checks.
By addressing the growing issue of dispute abuse and enhancing its fraud prevention capabilities, Socure continues to provide innovative solutions to protect businesses and consumers alike.Â
Q: What is dispute abuse?
A: Dispute abuse, also known as Reg-E policy abuse, involves consumers falsely disputing legitimate transactions for goods and services to get their money back. This form of first-party fraud is a growing problem, costing U.S. businesses billions of dollars annually.
Q: How does Socure's new tool work?
A: Socure's Dispute Abuse Score analyzes data from over 350 million identities and nearly 30 billion transactions. It looks at factors like dispute histories, account closures, payment denials, geolocation, and device information to identify repeat abusers and prevent financial losses.
Q: Why is dispute abuse difficult to detect?
A: Dispute abuse is challenging to detect because bad actors often hide behind clean or slightly manipulated identities to exploit consumer protections. Traditional methods of fraud detection may not be effective in identifying these sophisticated schemes.
Q: What are the benefits of Socure's Dispute Abuse Score for businesses?
A: Socure's Dispute Abuse Score helps businesses by auto-approving low-risk disputes and rejecting high-risk transactions to prevent losses. It also deters bad actors by requiring additional verification and adjusting fund availability or hold times for high-risk users.
Q: What other fraud prevention tools has Socure launched recently?
A: Recently, Socure launched a workforce verification solution designed to detect fraud during employee recruitment. This tool analyzes phone, email, device, geolocation, behavior, and education signals to flag suspicious applicants, who are then directed to stepped-up document and biometric checks.Â