Demand Deposit Account (DDA) fraud involves the exploitation of checking or savings accounts (demand deposit accounts) by fraudsters, who make unauthorized withdrawals or other fraudulent transactions, or open accounts using false or stolen identities. Common tactics seen with DDA fraud include check fraud, electronic funds transfer (EFT) scams, and account takeovers. DDA fraud can result in significant monetary losses and operational risk for financial institutions.
Use case/ examples for Demand Deposit Account (DDA) fraud
Check fraud: Withdrawing funds from checking accounts using counterfeit, altered, or stolen checks. Examples include legitimate checks with forged signatures, altered ("washed") checks with the payee and/or amount changed, or the creation of and cashing of counterfeit checks drawn on real accounts.
Unauthorized electronic transfers: Initiating unapproved electronic funds transfers like ACH or wire transactions from a compromised account, often done as part of account takeover activity. This might include initiating ACH pulls using stolen routing and account numbers, or triggering outbound wire transfers from a compromised business account.
Synthetic identity fraud: Opening new financial accounts using an identity composed of both real and fake personal information. A synthetic identity might combine a real Social Security number with a fake name. These accounts are often used to commit fraud or launder illicit funds, for example, laundering money by layering transactions across multiple accounts created with synthetic identities.
