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CBN spells out liability conditions for ATM frauds

Babajide Komolafe
The Central Bank of Nigeria (CBN) yesterday issued standards and guidelines on ATM operations, spelling out conditions for liability for ATM frauds.

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The CBN also mandated banks to ensure online monitoring mechanism to determine ATM vault cash levels, monitor and report suspicious transactions on agreed format and timeframe. |

The primary purpose  of the standards, the CBN said, “is to ensure the efficiency of ATM services and convenience as well as protection of customers. The standards and guidelines are expected to inform the conduct of ATM operations in Nigeria.

“Every institution (banks, non-banks or acquirer) that deploys ATMs or any issuer that issues card or token to be used at ATM shall comply with the following standards and guidelines with respect to each of the ATM facilities within its dominion and control”.

Among other things, the CBN spelled out the condition for determining which party is liable in the event of fraud.
It stated, “In the event of irregularities in the account of an ATM customer arising from the use of card on ATM, the following shall apply:

“All cardholders’ complaints should be treated within a maximum of 72 hours from the date of receipt the complaints”.
On the issue of liability in the case of fraud, the apex bank said, “Where a non EMV card is used on a non EMV terminal and a fraud occurs, liability is on either the card issuer or the card holder.

“Proof has to be established on which party compromised card details.  Where a non EMV card is used on an EMV terminal and fraud occurs, liability is on the card issuer.

“Where an EMV card is used on a non EMV terminal and fraud occurs, liability is on the Acquirer. Where an EMV card is used on an EMV Terminal and fraud occurs, liability is on the card holder or the Issuer.

“However, the onus is on the cardholder to prove that their PIN had not been disclosed to a third party willingly or negligently.

“Where a hybrid card is used on a non EMV terminal and fraud occurs, liability is on the acquirer. Where a hybrid card is used on an EMV terminal and card treated as magnetic stripe for authorization and fraud occurs, liability is on the card issuer

“Where a hybrid card is used on an EMV terminal and card treated as EMV for authorization and fraud occurs, liability is on the card holder or the Issuer. However, the onus is on the cardholder to prove that his/her PIN had not been disclosed to a third party willingly or negligently.”


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