Resolving disputes is “one of the most outdated, slow and expensive workflows in financial services,” with first-party fraud now making up 30% to 50% of total fraud losses, according to a Thursday (Aug. 7) press release.
First-party fraud refers to customers themselves intentionally deceiving financial institutions. They do this by disputing real transactions so they can keep the products without paying; applying for a credit card with no intention of repaying the issuer for purchases; and faking income or job information to get a credit card or loan, among other actions.
Unlike third-party fraud committed by thieves and hackers, first-party crimes perpetrated by the actual account holders are harder to detect.
“First-party fraud is on the rise, and financial institutions are armed with outdated tools,” Carlotta Siniscalco, partner at Emergence Capital, which led the funding round, said in the release. “Casap turns disputes — one of the most emotionally charged moments in finance — into an opportunity to earn trust, the only currency that matters.”
Casap fights first-party fraud by first modernizing the dispute process of financial institutions. Banks, credit unions and other institutions often use an array of tools to spot fraud. Casap replaces these tools with its one unified system to resolve cases faster, according to the release.
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This system deploys AI agents to handle the full process, from intake to chargeback filing and communicating the decision to the customers, the release said.
The AI agents analyze evidence, predict outcomes and automate key actions, which include issuing credits, filing chargebacks and responding to merchants. Casap issues a “fraud score” so financial institutions can identify suspicious consumers and merchants, per the release.
Chartway FCU and MidSouth Community FCU have seen fraud losses decline by more than 51% and have experienced positive ROI “in weeks” and were able to take on more cases without hiring new people by using Casap, the release said.
Lightspeed Venture Partners, Primary Venture Partners, SoFi and others participated in the funding round, according to the release.
The new investment brings Casap’s total funding to $33.5 million, a record for venture capital raised in the payment disputes category, the release said. The company plans to use the capital to expand its AI decision-making capabilities, grow its workforce and support broader use cases across the payments lifecycle.
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