The Central Bank of Nigeria (CBN), in its effort to curb the growing incidence of electronic fraud in the country, has issued a firm directive to banks and other financial institutions to refund customers who fall victim to Authorized Push Payment (APP) fraud within 48 hours.
Victims of APP fraud are customers who were tricked, deceived, or misled into willingly transferring money to fraudsters who may disguise themselves as representatives of legitimate financial institutions or fail to deliver on promised obligations. This fraud pattern typically depends on social engineering tactics and takes advantage of customer weaknesses.
The circular issued to all banks, other financial institutions, public advocacy groups, and the general public highlights strict conditions for how financial institutions must investigate, address, and refund cases of APP fraud. It emphasized that the directive is focused on making sure that customers affected by APP fraud are reimbursed within the mandated 48-hour window as soon as investigations are completed.
The circular titled “Draft Guidelines for Handling Authorized Push Payment Fraud” was signed by Rita I. Sike, director of the Financial Policy & Regulation Department of the CBN, and was published on Tuesday. It states that banks and OFIs must implement “a fair, timely, and transparent reimbursement process” for affected customers.
According to the CBN, “customers who are victims of APP fraud shall be eligible for reimbursement, subject to the investigation outcomes,” and the reimbursement “shall be made within 48 hours from the conclusion of a documented APP fraud investigation.”
The guideline states that an APP case involves more than one financial institution. Upon receipt of a customer complaint, the source institution must launch an investigation without delay and inform the receiving institution within 30 minutes.
All information shared throughout the investigation must adhere to the Nigeria Data Protection Act, 2023. The institutions involved are required to carry out a joint probe to identify operational lapses, determine the total loss and unrecoverable amount, outline a refund sharing formula, and recommend steps to prevent similar incidents in the future. In situations requiring joint investigations, the refund must be concluded within 16 working days from the date the incident was initially reported.
In the circular, the CBN explained that releasing the draft guidelines aligns with its mandate to maintain a stable financial system and curb the growing cases of APP fraud.
It emphasized that once completed, the guidelines will need financial institutions to implement strong preventive controls and effective procedures for detecting, mitigating, and managing APP fraud across all payment platforms.
The Bank also highlighted that Nigeria’s financial sector has greatly benefited from the expansion of digital channels—such as USSD, internet banking, and instant transfers—which have boosted efficiency, widened financial inclusion, and offered exceptional convenience to users.
The rapid expansion of these digital channels has, however, triggered a sharp increase in electronic fraud, leading to financial losses and reducing public confidence in the financial system. Among these threats, APP fraud has emerged as one of the most concerning forms. Unlike traditional fraud, where an account is accessed without the owner’s knowledge.
The CBN explained that its intervention is consistent with its responsibilities under the CBN Act of 2007 and the Banks and Other Financial Institutions Act (BOFIA) 2020 to uphold the stability and resilience of the financial system.
It noted that the new guidelines should be interpreted together with existing CBN regulations, such as the Consumer Protection Framework and other relevant circulars.
The draft guidelines also set out several key requirements.
Victims of APP fraud must notify their financial institution within 24 hours of the incident, though the CBN allows an additional 48-hour grace period when necessary. Reports must provide sufficient details, including the transaction date, amount, beneficiary account information, and any supporting evidence. Once the complaint is received, the financial institution must begin its investigation immediately, send an acknowledgment within 24 hours, provide a unique reference number, and outline the expected review timeline.
Furthermore, the CBN may instruct NIBSS or another settlement entity to withhold the full value of any transaction flagged as fraudulent, extending the freeze to subsequent beneficiary institutions if required. Full investigations must be completed within 14 working days, after which the customer must be informed of the outcome, including a clear explanation when reimbursement is denied.
The guidelines warn that any bank that fails to investigate within the specified time frame without a valid justification may be considered in violation of consumer protection rules and could face regulatory penalties.
However, the CBN also clarifies that if a customer does not report an APP fraud case within 72 hours and lacks a valid excuse—such as illness, force majeure, or delayed awareness—the financial institution may not be required to issue a refund, unless the incident resulted from internal control weaknesses or staff negligence.
Generally, the draft guidelines signify a firm commitment by the CBN to guard consumers, reinforce confidence in the financial system, and establish a clear, timely process for resolving APP fraud cases, centered on the requirement that victims be refunded within 48 hours after investigations are completed.
