The Central Bank of Nigeria (CBN) has published new draft guidelines designed to accelerate the refund process for customers who fall victim to online banking scams. Under the proposal, individuals affected by Authorised Push Payment (APP) fraud will have up to 72 hours to report the incident, after which banks must promptly investigate and determine refund eligibility.
The guidelines were detailed in a document titled “Draft Guidelines for Handling Authorised Push Payment Fraud”, released on Tuesday and signed by Rita I. Sike, Director of Financial Policy & Regulation.
New Fraud Reporting Timeline
The document explains that customers should ideally report fraudulent APP transactions within 24 hours. However, an additional 48-hour grace period is given, bringing the total reporting period to three days.
The CBN stated that the guidelines are intended to reduce the surge in digital fraud cases and strengthen consumer safeguards across the financial sector.
“When finalised, these Guidelines will require all financial institutions to adopt preventive frameworks as well as effective procedures for detecting, mitigating, and managing APP fraud,”
— CBN
Customers who fail to submit reports within the 72-hour window without a valid reason may not qualify for refunds.
Acceptable reasons include:
- Medical emergencies
- Force majeure events
- Security constraints
- Delayed discovery of the fraudulent transaction
- Lack of access to reporting channels
However, the CBN stressed that when fraud results from institutional failures, such as poor controls, negligence, or staff collusion, banks and OFIs are still required to reimburse affected customers.
Defining Authorised Push Payment (APP) Fraud
The draft outlines APP fraud as situations where individuals are tricked, influenced, or manipulated into authorising transactions that lead to financial loss. These scams may occur through WhatsApp, SMS, social media, email, or other communication platforms.
Banks may also be implicated in APP fraud through:
- Weak or faulty KYC processes
- Failure to act on red-flag alerts
- Staff involvement or collusion
- Use of bank accounts for fraudulent purposes
- Delayed complaint resolution
Mandatory 24/7 Fraud Reporting Channels
The CBN has instructed banks and Other Financial Institutions (OFIs) to establish round-the-clock reporting channels, which may include:
- Toll-free customer service phone lines
- Email support
- USSD or SMS options
- Mobile banking applications
- Official social media accounts
- Physical branch reporting
These platforms must be accessible 24/7, and banks must attend to fraud complaints within 72 hours.
Institutions are also required to build an Early Warning System (EWS) to detect unusual account behavior. Accounts flagged for suspicious activity may face enhanced monitoring or temporary restrictions pending investigation.
Clear Investigation and Refund Timeline
Upon receiving a complaint, banks must:
- Confirm receipt within 24 hours
- Provide a unique case reference number
- Share an overview of the investigation process and expected timelines
The CBN may instruct NIBSS or relevant settlement entities to withhold the full value of suspected fraudulent transactions during review.
Banks are required to complete investigations within 14 working days and clearly notify customers of the outcome, stating whether refunds have been approved or denied.
Failure to conclude investigations within the stipulated period, without valid justification, may result in regulatory penalties for violating consumer protection standards.
