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CBN orders banks to establish electronic fraud desks by July 1

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The Central Bank of Nigeria (CBN) on Friday announced the establishment of the Nigeria Electronic Fraud Forum (NeFF) as part of its effort to combat fraudulent activities in the banking industry, particularly those associated with increased use of electronic payment systems.

The bank’s Director, Banking and Payments Systems Department, Dipo Fatokun, said the establishment of the new industry desk followed submissions to the NeFF and consultation with the deposit money banks as well as electronic payments service providers.

The new desk, Mr. Fatokin said, would set up effective mechanisms for receiving and responding promptly to fraud alerts, to help manage and reduce electronic payments fraud in the country’s banking industry.

In a memo to all DMBs, switches and payment service providers, the CBN gave all banks and e-payment platforms July 1 deadline to set up and staff  a functioning Fraud Desk.

The staff of the desks must be trained on emerging fraud trends on various electronic payments channels, the circular said.

Defaulting banks risk serious sanctions
The desk would provide, among other services, support to customers on electronic fraud with a minimum of 10 dedicated phone lines, manned and available at all times, to handle calls directed from contact centre for fraud alerts and complaints.

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

In addition, the desk would have the responsibility to sensitise customers on e-fraud and fraud desk services as well as manage/resolve all intra-bank issues by leveraging an enterprise fraud management system.

Under the new arrangement, the NIBSS would be responsible for coordinating the industry as 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 and 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 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, all interbank transactions on all electronic channels are expected to be passed through the central anti-fraud solution in NIBSS, which shall have access to each bank record of fraudulent transactions and provide monthly reports to the CBN.

All banks are expected to implement across all electronic channels an enterprise fraud monitoring system that would ensure behavioural monitoring, patterns and hold/block controls on transactions suspected to be fraudulent.

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