To effectively combat the rising fraud in Nigeria’s banking industry, customers must report fraudulent transactions within 72 hours, enabling financial institutions—including banks and fintechs—to conduct investigations and provide refunds within a 16-working-day cycle.
- To effectively combat the rising fraud in Nigeria’s banking industry, customers must report fraudulent transactions within 72 hours, enabling financial...
- This deadline underscores the urgency and importance of timely reporting for successful resolution.
- In 2015, financial institutions were required to set up specialised fraud desks to assist clients with electronic fraud.
- “This may extend to second-level or other subsequent beneficiary institutions along the transaction chain,” the CBN said.
Keep reading for the full breakdown on Authorised Push Payment fraud — everything you need to know is covered below.
This deadline underscores the urgency and importance of timely reporting for successful resolution.
The new regulations are a response to the ongoing rise in financial sector fraud in Nigeria. According to data from the Financial Institutions Training Centre (FITC), fraud losses increased 603 per cent to ₦3.29 billion ($2.27 million) in the first quarter of 2025, with 12,347 incidents reported—a 7.63 per cent rise from the year before.
To improve prevention, increase bank accountability, and expedite victim payouts, the CBN published proposed rules for managing Authorised Push Payment (APP) fraud on November 26, 2025, marking a significant step in the regulatory timeline.
“When finalised, the Guidelines would mandate all financial institutions to institute preventive measures as well as modalities for mitigating and managing APP fraud,” a circular signed by Rita Sike, director, Financial Policy and Regulation Department, read.
CBN’s commitment to combat fraud
This signifies the CBN’s ongoing battle against fraud, which has lasted for more than ten years. The Nigeria Electronic Fraud Forum (NeFF) was founded in 2011 to promote communication and information sharing among operators regarding fraud-related matters. In 2015, financial institutions were required to set up specialised fraud desks to assist clients with electronic fraud.
Stricter Know Your Customer (KYC) regulations were introduced in 2023, requiring clients to present their national identity number (NIN) or bank verification number while opening an account or wallet.
The top bank directed the Nigeria Inter-Bank Settlement System (NIBSS) to debit the accounts of commercial banks that collect income from fraud in 2024.
According to the CBN, it is the act of deceiving a consumer into approving a payment to a third-party account or wallet using email, SMS, WhatsApp, or other means.
“Facilitation, negligence, or non-compliance by financial institutions, such as failure to act on red flags, weak Know Your Customer (KYC) or fraud controls, staff collusion, delayed resolution, and use of accounts for fraudulent purposes,” it said.
APP fraud victim must report within 78 hours
Any consumer who falls victim to APP fraud has seventy-two hours to report the situation. Reports should contain the recipient’s information, the transaction date, the amount, and any supporting documentation.
Banks must now acknowledge the information within a day and begin an investigation immediately.
The CBN can order NIBSS or any other relevant settlement organisation to withhold payment for any fraudulent transaction during an inquiry. “This may extend to second-level or other subsequent beneficiary institutions along the transaction chain,” the CBN said.
CBN will wade into unresolved cases
Unresolved cases may be sent to the CBN’s Consumer Protection and Financial Inclusion Department, and investigations must be completed within 14 working days. After the investigation is over, reimbursements must be provided within 48 hours.
When more than one financial institution is involved in an APP fraud occurrence, the initial financial institution must initiate an inquiry and notify the other institution or institutions within 30 minutes.
It is anticipated that the impacted institutions will compensate within 16 working days after the incident’s initial reporting.
A financial institution bears the expense if its systems are insufficient to identify or stop a fraudulent transaction. Banks must distribute refunds evenly when neither the client nor any financial institution is at fault.
Customers who are entitled to a refund
Consumers who report fraud within 72 hours, assist investigations, show no signs of carelessness or criminal intent, were misled, or lack adequate bank safeguards, are entitled to payment.
Customers who engage in dishonest or careless behaviour, fail to notify the fraud within 72 hours, or whose transactions occur before the guideline’s effective date are not entitled to refunds.
There are exceptions to the 72-hour rule if fraud is caused by the carelessness of bank employees, internal control shortcomings, or delays due to illness, natural disasters, or the unavailability of reporting routes.
Penalties for violators
If investigations fail to conclude within the designated period without a valid reason, regulatory penalties will now apply. If customers are unhappy with the results of any investigation, they can also bring their concerns to the attention of the CBN.
However, both the individual and the bank will face penalties if they give the CBN inaccurate, deceptive, or insufficient information.
Financial institutions must have 24/7 fraud reporting channels, Early Warning Systems (EWS) to detect and mitigate APP fraud, red flag suspicious accounts, monitor behaviour, and document fraud indicators; regularly report APP fraud incidents to the CBN, and conduct customer financial literacy outreach to ensure the successful implementation of this new rule.
The public and financial institutions have three weeks to comment on the draft guideline. Once completed, it would be a crucial component of the CBN’s ongoing endeavour to fortify Nigeria’s financial system.