First-Party Fraud Trend Analysis: Account, Free Trial, and Refund Abuse

From November 2025 to February 2026, malicious free trials noticeably increased across the Stripe network. Stripe viewed this as part of a broader expansion of first-party fraud, and analyzed together account abuse at the account creation stage, free trial abuse at the evaluation stage, and refund fraud at the post-usage stage.

Analyzing not just millions but hundreds of millions of transactions, these three types were confirmed as the fastest-growing patterns. Across the industry, 62% of merchants experienced increased disputes from first-party fraud over the past year, and each dispute incurs $35 per $100 in management costs.

Account abuse is especially damaging to AI companies. 1 in 5 consumers said they sign up by changing their email or contact information to use promotions multiple times, with Gen Z at 29% and Millennials at 27%. In Stripe's analysis, 7.4% of new sign-ups at AI companies were linked to suspicious multiaccount abuse, with patterns showing a single payment method identifier connected to dozens or hundreds of emails, IPs, and names. Stripe is preparing a new Radar feature that evaluates potential abuse likelihood at registration and login events.

Free trial abuse is growing even faster due to the expanding legitimate use of AI companies and virtual cards. AI startups offering self-serve sign-up and direct API access experience 10x more attempted abuse than enterprise AI solutions. The old approach of blanket-blocking virtual cards now also blocks legitimate users, hurting conversion rates. Stripe added a Radar feature that predicts common free trial terms-of-service violations with 90% accuracy, along with an analytics page showing blocked high-risk payments.

Refund abuse causes roughly $100 billion in losses globally each year. 27% of shoppers with online return experience admitted to wardrobing, rising to 49% among Gen Z. Some bad actors use 100+ email variations and multiple payment cards to circumvent unlimited refund policies or recurring fees, and since transactions appear as normal purchases at the time of purchase, they often aren't detected until the post-purchase refund stage.

Stripe continues to develop tools that identify and reduce first-party fraud by expanding its existing AI infrastructure and Radar, and is accepting inquiries for early access to account abuse and preview participation for refund abuse, respectively.