The Central Bank of Nigeria (CBN) has issued a firm directive mandating banks and other financial institutions to refund customers who fall victim to Authorised Push Payment (APP) fraud within 48 hours, marking a major regulatory step to curb the escalating cases of digital fraud nationwide.
APP fraud occurs when individuals are deceived into voluntarily transferring money to scammers who often pose as credible organisations or fail to deliver promised services. These schemes usually rely on social engineering tactics that exploit customer trust and vulnerability.
The new mandate was contained in a circular addressed to banks, financial institutions, consumer protection groups and the general public. The document outlines rigorous standards for investigating and resolving APP fraud cases, with a clear emphasis on ensuring that verified victims are reimbursed promptly once investigations conclude.
The circular, titled “Draft Guidelines for Handling Authorised Push Payment Fraud,” was signed by Rita I. Sike, Director of the Financial Policy & Regulation Department, and made public on Tuesday.
It requires financial institutions to maintain “fair, timely and transparent” refund processes, adding that eligible victims must be reimbursed within 48 hours after a documented investigation is completed.
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The guideline specifies that when multiple financial institutions are involved in a fraud case, the originating bank must initiate an investigation immediately and notify the receiving bank within 30 minutes of the customer’s complaint. All data shared during the process must comply with the Nigeria Data Protection Act, 2023.
Institutions must jointly determine any operational lapses, unrecoverable funds and reimbursement responsibilities. In such joint investigations, refunds must be finalised within 16 working days from the initial report.
The CBN emphasised that the draft framework aligns with its mandate to strengthen financial stability and address the surge in APP fraud. Once fully implemented, the guidelines will require banks and financial institutions to deploy stronger preventive measures and strengthen fraud-management systems across all digital payment platforms.
The apex bank also noted that Nigeria’s rapid transition to digital channels including USSD, internet banking and instant transfers has enhanced convenience and boosted financial inclusion, but also created new avenues for fraud that must be urgently addressed.
