First Party Fraud

Definition

"First Party Fraud" means a fraud that is committed by an individual or group of individuals on their own account with no intention of any repayment of the loss caused.

Lending Context

A first party fraud generally occurs when the party misrepresents its financial abilities on the application forms and by using another person's identifying information. Any fraud which is initiated at a later stage of the lifecycle of a credit product, such as the misstatement of financial reports, even when it is used to prolong or to extend an existing credit product does not fall within this definition

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