POS Merchants Urge CBN to Change Charge-Back Policy

POS merchants operating in Nigeria has called on the Central
Bank of Nigeria (CBN) to change its policy on charge-back claims on
POS transactions as fraud increases at an alarming rate.

In a statement by their Secretary-General, Dr. Emmanuel Patrick,
the merchants said the extant CBN policy allowed POS cardholders to
lodge a charge-back claim within six months of the transaction.

However, the statement noted that the POS Merchants had only 48
hours to defend the claim, otherwise the merchants will be
automatically debited by the switch company.

It explained that the strategy fraudulent cardholders “has
adopted is to wait for a month or more before raising a false
charge-back claim with their banks, knowing that the POS merchants
may not defend the claim, because the transaction receipt might
either have faded out or might have been archived.

“Merchants have reportedly lost millions of Naira to fraudsters
as reports show rising cases of this type of fraud in the
country.

“The rise may not be unconnected with the rising public
awareness of the process, making fraudsters to exploit the
loopholes on daily basis with different Merchant outlets using
different cards.”

Consequently, the statement said POS Merchants in the country
wanted the CBN to enact a policy that will criminalize the act of
false charge-back claims to minimize its occurrence.
He added that the merchants also wanted the CBN to mandate banks to
reject the false charge-backs at their end using the evidence they
already have in their system.

The merchants urged the CBN “to review the six-month period,
cardholders have to lodge a complaint and the 48 hour response time
available for merchants to respond to claims of charge-backs.

“They are proposing that cardholders should have a maximum of
one month to claim while merchants should have one to two weeks to
defend claims.
“The POS merchants reiterate their commitment to the CBN policy to
entrench a cashless society for the good of Nigeria.”

POS merchants operating in Nigeria has called on the Central
Bank of Nigeria (CBN) to change its policy on charge-back claims on
POS transactions as fraud increases at an alarming rate.

In a statement by their Secretary-General, Dr. Emmanuel Patrick,
the merchants said the extant CBN policy allowed POS cardholders to
lodge a charge-back claim within six months of the transaction.

However, the statement noted that the POS Merchants had only 48
hours to defend the claim, otherwise the merchants will be
automatically debited by the switch company.

It explained that the strategy fraudulent cardholders “has
adopted is to wait for a month or more before raising a false
charge-back claim with their banks, knowing that the POS merchants
may not defend the claim, because the transaction receipt might
either have faded out or might have been archived.

“Merchants have reportedly lost millions of Naira to fraudsters
as reports show rising cases of this type of fraud in the
country.

“The rise may not be unconnected with the rising public
awareness of the process, making fraudsters to exploit the
loopholes on daily basis with different Merchant outlets using
different cards.”

Consequently, the statement said POS Merchants in the country
wanted the CBN to enact a policy that will criminalize the act of
false charge-back claims to minimize its occurrence.
He added that the merchants also wanted the CBN to mandate banks to
reject the false charge-backs at their end using the evidence they
already have in their system.

The merchants urged the CBN “to review the six-month period,
cardholders have to lodge a complaint and the 48 hour response time
available for merchants to respond to claims of charge-backs.

“They are proposing that cardholders should have a maximum of
one month to claim while merchants should have one to two weeks to
defend claims.
“The POS merchants reiterate their commitment to the CBN policy to
entrench a cashless society for the good of Nigeria.”