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CBN tells banks to establish fraud desks

By on June 16, 2015

he Central Bank of Nigeria has directed Deposit Money Banks to maintain dedicated fraud desks in order to stem frauds within the banking industry.

The CBN said in a circular that it had established the Nigeria Electronic Fraud Forum to proffer solutions to the issue of frauds arising from the increased adoption of electronic payments.

The Director, Banking and Payments Systems Department, CBN, Mr. Dipo Fatokun, said following submissions to the bank by the NeFF and consultation with banks and electronic payments service providers, it had become imperative that an effective mechanism for receiving and responding promptly to fraud alerts be set up in the banking industry towards managing and reducing successful electronic payments fraud rates.

Fatokun said, “To this end, all DMBs, MMOs, switches and all payment service providers are hereby directed to maintain a dedicated fraud desk in their respective organisations.

“The fraud desk shall be appropriately staffed with personnel that have requisite training on emerging fraud trends on various electronic payments channels.”

The circular stated that the desk would provide support to customers on electronic frauds, with a minimum of 10 dedicated phone lines manned and available at all times.

The desk is also expected to log on all customer fraud alerts and complaints, and redirect them to the appropriate authorities in line with internally pre-defined path, while preparing and submitting reports regularly to the Nigeria Inter-bank Settlement System on fraud information.

The desk is expected to sensitise customers on e-fraud and fraud desk services as well as manage/resolve all intra-bank issues by leveraging on enterprise fraud management system.

“Banks shall implement across all electronic channels an enterprise fraud monitoring system, which ensures behavioural monitoring, patterns and hold/block controls on transactions suspected to be fraudulent.

“The provisions of this circular shall take effect from July 1, 2015, and failure to comply shall attract appropriate sanctions,” the CBN said.

Under the new arrangement, the NIBSS will be responsible for coordinating the industry as the provider of electronic platform for all the fraud desks across all banks, mobile money operators, switches and payments service providers to log frauds.

The NIBSS will also maintain direct and dedicated lines as well as email contacts of all stakeholders for the purpose of exchanging information and coordinating industry response to fraud attempts and incidents.

It will also ensure that the DMBs receive enhanced e-fraud portal/instant payment platform, with capabilities for banks to initiate ‘block’ and ‘hold funds’ electronic messages from a bank’s fraud desk to the other, while providing operational rules for effective fraud desk coordination.

Under the new arrangement, interbank transactions on all electronic channels are expected to be passed through the central anti-fraud solution in the NIBSS, which will have access to each bank’s record of fraudulent transactions and provide monthly reports to the CBN.

 

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