CBN Orders 48-Hour Refunds for APP Fraud Victims
In a decisive move to tighten consumer protection across Nigeria’s fast-expanding digital payments ecosystem, the Central Bank of Nigeria has issued a draft guideline mandating banks and other financial institutions to refund victims of Authorised Push Payment (APP) fraud within 48 hours after concluding investigations.
The directive, which forms part of the newly released Guidelines for Handling Authorised Push Payment Fraud, is expected to transform dispute-resolution practices, restore public confidence, and impose stricter responsibilities on operators within the financial system.
The draft framework, dated November 26, 2025, was published on the apex bank’s website on Tuesday and immediately triggered reactions across the financial sector, given its potential to reshape how banks respond to fraud incidents driven by social engineering, impersonation, false pretences, and digital deception.
According to the CBN, APP fraud has grown rapidly with the rise of cashless transactions, thriving especially on the “trust gap” that criminals exploit to trick customers into authorising transfers themselves.
Because such transfers are technically initiated by victims, they are often difficult for banks to reverse, leading to losses that erode consumer trust in electronic channels.
CBN Orders 48-Hour Refunds for APP Fraud Victims: Key Requirements for Banks
Under the proposed rules, financial institutions are now required to complete investigations into reported APP fraud within 14 working days, after which refunds must be processed within two days in cases where customers qualify.
The apex bank emphasised that delays in meeting timelines would constitute a breach of consumer-protection obligations and attract regulatory sanctions.
The guideline outlines the following mandatory responsibilities for banks:
Immediate Acknowledgement and Tracking
Institutions must acknowledge fraud complaints within 24 hours and issue each customer a unique case reference number to track investigations. This requirement aims to eliminate the recurrent complaint by customers that their reports are ignored or lost in internal processes.
Faster Inter-Bank Coordination
Where more than one institution is involved in a disputed transaction, the originating bank must open an investigation immediately and notify all other parties within 30 minutes of receiving the complaint. This is designed to freeze suspicious inflows more quickly and prevent stolen funds from being transferred through multiple accounts.
Qualification for Reimbursement
A victim is eligible for a refund if the disputed transaction was authorised under false pretences or manipulation, was reported within 72 hours, and there is no evidence of negligence, collusion, or criminal intent. The CBN also instructed banks to apply heightened care when dealing with vulnerable customers, including the elderly, persons living with disabilities, and individuals with limited digital literacy.
Waiver for Exceptional Circumstances
Though reporting within 72 hours remains a central condition, the draft allows exemptions for cases involving illness, lack of access to reporting channels, mobility constraints, security challenges, or emergencies that could reasonably delay notification.
Tougher Accountability and Penalties for Non-Compliance
The CBN’s new rulebook places a significant burden of accountability on banks, warning that institutions with weak detection systems will be held liable for losses that could have been prevented.
If a bank fails to block or flag red-flag transactions due to outdated or inadequate monitoring systems, it may be debited for the full value of the customer’s claim.
Institutions may also face regulatory penalties if they fail to meet refund timelines, mismanage customer complaints, or neglect fraud-awareness requirements.
The guidelines recommend urgent upgrades to Early Warning Systems, fraud-analytics units, automated monitoring tools, and internal compliance structures across the sector.
Furthermore, the apex bank is introducing quarterly reporting obligations.
Banks must now file periodic returns on APP fraud statistics, resolution outcomes, financial literacy campaigns, and newly implemented safeguards.
These reports will enhance CBN oversight and allow regulators to track emerging fraud patterns more effectively.
Expanded Reporting Channels and Customer Support
To reduce the communication gaps that often frustrate customers, the guidelines mandate banks to keep multiple reporting channels active 24/7.
These include email platforms, USSD short codes, mobile-banking apps, customer-service hotlines, and physical branch walk-ins.
The CBN believes that improving ease of reporting will significantly boost early detection and increase the odds of recovering fraudulent transfers.
Banks are also required to organise quarterly fraud-awareness campaigns aimed at educating customers on safe digital practices, scam tactics, and preventive measures.
The central bank stressed that combating APP fraud requires stronger public participation and a more informed user base.
Escalation Process and Final Decision Authority
In situations where banks involved in a disputed transaction fail to resolve the matter within the stipulated timeline, the guideline states that the case will be escalated to the Consumer Protection and Financial Inclusion Department of the CBN. The department will then issue a binding decision.
In instances where neither the sending nor receiving bank is found liable, yet the customer meets the criteria for reimbursement, the burden of refund will be shared equally between both institutions.
This provision is expected to encourage quicker collaboration between banks when tracing fraudulent funds.
Industry Impact and Rising Fraud Incidents
The new draft rules come at a time of heightened concern about fraud in Nigeria’s financial sector.
Earlier reports indicated that banks recorded N42.33 billion in fraud-related losses in the first half of 2024 alone, with significant increases across digital channels such as mobile transfers, USSD, online banking, and card transactions.
Stakeholders believe that the CBN’s 48-hour refund rule could significantly change customer perceptions about safety in digital payments.
It also reflects global trends, as central banks in other jurisdictions have adopted stronger reimbursement policies to protect consumers from sophisticated social-engineering tactics.
The guideline was issued by Dr. Rita Sike, Director of the CBN’s Financial Policy and Regulation Department, who invited banks, fintech operators, and members of the public to submit comments within a three-week window.
Once finalised, the rules are expected to introduce one of Nigeria’s most comprehensive consumer-protection frameworks for digital payments, reinforcing the government’s long-term vision of a trusted, secure, and inclusive cashless economy.
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