The Central Bank of Nigeria (CBN) has issued a major directive requiring banks and other financial institutions to refund victims of Authorised Push Payment (APP) fraud within 48 hours after completing investigations. The move marks one of the strongest steps yet by the apex bank to curb rising electronic fraud and rebuild public trust in Nigeria’s digital financial system.
APP fraud occurs when customers are tricked, often through impersonation, deception or social engineering, into willingly transferring money to fraudsters. Unlike account-takeover fraud, the customer authorises the payment but under false pretences.
The new directive, contained in a draft circular titled “Guidelines for Handling Authorised Push Payment Fraud” and signed by Rita I. Sike, Director of the Financial Policy & Regulation Department, sets strict timelines and obligations for financial institutions.
According to the CBN, affected customers “shall be eligible for reimbursement, subject to investigation outcomes,” and refunds “must be made within 48 hours from the conclusion of a documented APP fraud investigation.”
How Banks Must Handle APP Fraud Cases
Under the draft guidelines:
1. Immediate Action
Once a customer reports a case, banks must:
- Acknowledge the complaint within 24 hours
- Issue a unique case reference number
- Begin investigations immediately
Customers are expected to report incidents within 24 hours, with an additional 48-hour grace window allowed in certain circumstances.
2. Multi-bank Fraud Cases
If more than one financial institution is involved:
- The originating bank must contact the receiving bank within 30 minutes.
- Both institutions must jointly investigate the incident.
- The process must comply with the Nigeria Data Protection Act 2023.
Joint investigations must be completed within 16 working days, and reimbursement must follow this timeline.
3. Completion of Investigations
All investigations, whether involving one bank or multiple, must conclude within 14 working days. Banks must then notify customers of the outcome and provide clear reasons when reimbursement is denied.
The CBN may also direct NIBSS or other settlement entities to temporarily block or withhold funds linked to suspected fraudulent transactions.
Consequences for Banks
Banks that fail to carry out investigations within the stipulated timelines, without reasonable justification, may be deemed non-compliant with consumer protection rules and face regulatory sanctions.
However, if customers fail to report incidents within 72 hours, banks may not be required to reimburse them unless internal failures or staff negligence contributed to the fraud.
Why the CBN Is Acting Now
The CBN said the draft guidelines align with its mandate under the CBN Act 2007 and BOFIA 2020 to ensure a safe, sound and resilient financial system. They complement existing regulations, such as:
- The Consumer Protection Framework
- Other payment systems circulars
The apex bank noted that digital payment channels, USSD, mobile apps, internet banking and instant transfers have improved efficiency and financial inclusion. But the rapid rise in usage has been accompanied by a surge in electronic fraud, especially APP fraud, which exploits customer trust and psychological manipulation.
The guidelines, the CBN said, will force banks to strengthen internal controls, deploy preventive tools and adopt robust investigative processes across all payment platforms.
A Push to Restore Trust
With electronic fraud increasing and public confidence wavering, the CBN’s new directive signals a tough, consumer-focused stance. By mandating quick refunds, capped at 48 hours after investigation, the regulator aims to reassure customers that the financial system can protect them in an increasingly digital economy.
The guidelines are currently in draft form and open for stakeholder input. Once finalised, they are expected to become one of the most consequential consumer protection policies in Nigeria’s digital payments landscape.
