Banks to pay customers for mobile bank fraud- CBN

Ebun Francis

| The central bank of Nigeria has assured customers who lose money to fraudsters through the mobile money-driven Unstructured Supplementary Service Data (USSD) banking will be reimbursed by their banks. The platform allows customers to transfer money to third party, buy airtime, open accounts, pay bills and book travels, among other services, using their mobile phones. This was disclosed by Mr Dipo Fatokun, the CBN director of banking and payments department at a forum organised by financial correspondents in Lagos over the weekend.

According to Fatokun, commercial banks in the country are yet to perfect the security around the USSD transaction plan. They are not providing additional security, such as allowing PIN into the transaction process as against the current practice whereby customers rely on the last four digits of their ATM cards for transactions. This is against the apex banks express directive for them to do so and which has resulted resulted in many customers losing their money to fraudsters or people who have access to their ATM cards.

The cbn director who spoke on the theme: “Recent developments in the electronic payments system and implications for consumers of electronic payment services”, said, “We have reviewed the process of USSD and instructed banks that they must use a PIN. It is possible for people to come in contact with your phone, and also come in contact with your ATM card and so, use the last four digit of your card as PIN and that is dangerous. Give a customer a PIN, which is known only to him. One of the banks, I won’t mention names, told us they needed to do system configuration, to ensure that customers can use one time password (OTP) or give the customer password or a token.”

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“Meanwhile, until that is done, the banks assured us, in writing, that any customer that suffers losses, they would pay. So, if you have cases of people who have suffered losses on USSD platform and their money has not been refunded, let us have it,” he said.

The apex banks data showed that about N40 billion transactions were carried out through the mobile money network monthly. The data also indicate that  e-fraud rate in terms of value dropped by 63 per cent last year, after the introduction of Bank Verification Number (BVN) and improved collaboration among banks via the fraud desks.