CBN directs banks to refund APP fraud victims within 48 hours

The Central Bank of Nigeria (CBN) has mandated all deposit money banks to ensure that customers who fall victim to Authorized Push Payment (APP) fraud receive full refunds within 48 hours of reporting the incident. The directive underscores the apex bank’s determination to protect consumers and curb the rising incidence of APP scams, which have increasingly affected individuals and businesses across the country.

APP fraud, commonly associated with scams in which individuals are tricked into authorizing payments to fraudsters, has become a major source of concern in Nigeria’s banking sector. In recent months, the cases have surged, affecting thousands of customers and resulting in significant financial losses. The CBN’s new guideline aims to provide swift relief to victims while holding banks accountable for lapses in security and fraud prevention measures.

Under the directive, banks are required to implement immediate processes to verify reported APP fraud cases and initiate refunds within the stipulated 48-hour window. The apex bank emphasised that timely action is crucial to maintain public confidence in the financial system and to reinforce the principle that consumers should not bear the cost of losses resulting from fraudulent transactions facilitated through their accounts.

CBN further clarified that the 48-hour refund timeline applies to verified cases, and banks must establish internal protocols to ensure that fraud complaints are promptly escalated and resolved. The central bank warned that failure to comply with the directive could attract sanctions, including penalties, regulatory censure, or other corrective measures to enforce compliance. Banks are also expected to report fraud cases and refunds processed to the CBN regularly for monitoring and accountability purposes.

The apex bank’s initiative reflects growing concern over the vulnerabilities associated with APP fraud, which often exploits human error, social engineering, or weaknesses in transaction verification processes. By enforcing rapid reimbursement, the CBN aims to protect consumers, encourage responsible banking practices, and promote greater vigilance in the detection and prevention of fraud.

Banking industry stakeholders have welcomed the directive, noting that it provides a clear framework for consumer protection and incentivises financial institutions to strengthen their internal security measures. Observers noted that while banks have long been expected to mitigate fraud risks, the 48-hour refund mandate sets a concrete standard, signalling stronger regulatory oversight and customer-centered policy.

Experts emphasised that in addition to refunds, banks will need to enhance fraud detection systems, improve staff training, and deploy technological solutions such as real-time transaction monitoring, two-factor authentication, and artificial intelligence-based alerts to prevent future occurrences. They also highlighted the importance of consumer education, urging customers to verify payment instructions and remain vigilant against social engineering tactics.

Consumer rights groups praised the CBN for taking a decisive step to protect depositors, describing the 48-hour refund requirement as a significant improvement over previous timelines, which often left victims waiting for weeks or months. They noted that the directive could serve as a deterrent to fraudsters, as banks now face regulatory and financial consequences if they fail to respond promptly.

CBN further stressed that the measure aligns with its broader efforts to enhance the resilience and credibility of Nigeria’s financial system. By enforcing accountability, the apex bank aims to reduce losses, restore trust, and ensure that digital banking channels remain safe and reliable for consumers. Officials also indicated that the directive complements other ongoing reforms, including increased monitoring of electronic payments, strengthened authentication protocols, and collaboration with law enforcement agencies to prosecute offenders.

Banks have been instructed to communicate the new policy to all customers, highlighting the process for reporting APP fraud and the expected refund timeline. Financial institutions are also required to provide transparent updates to victims during the verification and refund process, ensuring clarity and confidence.

The directive is expected to have immediate impact, as customers who have fallen victim to APP scams will now have recourse to swift reimbursement, reducing financial stress and enhancing trust in the banking system. The CBN also encouraged banks to proactively investigate suspicious transactions and adopt preventive measures to minimise exposure to APP fraud.

Overall, the CBN’s 48-hour refund policy represents a strong commitment to consumer protection, financial system integrity, and the promotion of safe banking practices. It signals to customers that their deposits are secure, even in the face of sophisticated fraud schemes, while motivating banks to strengthen operational controls and risk management systems. As the directive takes effect, both banks and consumers are expected to benefit from improved safeguards, faster remediation of fraud cases, and greater confidence in Nigeria’s digital banking ecosystem.