CBN Proposes 72-Hour Refund Rule for Victims of Bank Fraud Under New APP Guidelines
The Central Bank of Nigeria (CBN) has unveiled new draft guidelines that could significantly speed up the refund process for victims of online banking fraud. Under the proposed framework, customers affected by Authorised Push Payment (APP) fraud will have up to 72 hours to report the incident, after which banks must investigate and issue refunds within a stipulated timeline.
The policy was contained in a document titled “Draft Guidelines for Handling Authorised Push Payment Fraud”, released by the CBN on Tuesday and signed by Rita I. Sike, Director of the Financial Policy & Regulation Department.
72-Hour Reporting Window for Victims
According to the draft, customers are expected to report APP fraud within 24 hours of the incident using designated bank channels. However, they are allowed an additional 48 hours to make the report, bringing the total reporting window to 72 hours.
The CBN noted that the guidelines aim to curb the rising cases of APP fraud and strengthen consumer protection across the financial system.
“When finalised, the Guidelines would mandate all financial institutions to institute preventive measures as well as modalities for mitigating and managing APP fraud,”
— CBN statement
The apex bank warned that customers may lose eligibility for reimbursement if they fail to report incidents within the 72-hour window without a reasonable justification.
Valid justifications may include:
- Illness or medical emergencies
- Force majeure events
- Security concerns
- Late awareness of the fraudulent transaction
- Unavailability of reporting channels
However, the CBN emphasised that where bank failures, such as weak controls, staff negligence, or collusion, contribute to the fraud, institutions must still issue refunds.
What Counts as Authorised Push Payment (APP) Fraud?
The guidelines define APP fraud as situations where victims are manipulated, deceived, or coerced into authorising payments that lead to financial loss. This may occur through communication channels such as WhatsApp, SMS, email, phone calls, or social media.
APP fraud could also result from:
- Poor Know Your Customer (KYC) processes
- Ignored red flags
- Staff involvement in fraud
- Accounts used for fraudulent activities
- Delayed resolution of customer complaints
Banks to Provide 24/7 Reporting Channels
To support the new framework, the CBN has directed Banks and Other Financial Institutions (OFIs) to establish robust, always-available reporting channels, including:
- Customer service hotlines (including toll-free lines)
- SMS/USSD options
- Mobile banking apps
- Verified social media handles
- In-branch reporting
These channels must operate 24/7, and customers who report fraud must receive assistance within 72 hours.
Financial institutions are also required to adopt an Early Warning System (EWS) for proactive detection of suspicious accounts and fraud patterns. Red-flagged accounts may be subjected to enhanced monitoring or temporary restrictions pending review.
Faster Investigation and Resolution Timeline
Upon receiving a fraud report, banks must:
- Acknowledge receipt within 24 hours
- Issue a unique reference number
- Outline the investigation process and expected timelines
The CBN may also instruct NIBSS or other settlement entities to withhold the full value of transactions flagged as fraudulent during investigations. Banks must conclude investigations within 14 working days and communicate clear outcomes—whether reimbursement is approved or denied. Failure to comply with the timeline without a reasonable justification may attract regulatory sanctions for breaching consumer protection standards.
