CBN orders banks to destroy cards trapped in ATMs

The Central Bank of Nigeria has directed Deposit Money
Banks to henceforth destroy Automated Teller Machine cards
trapped in their ATM terminals.
The CBN also gave banks 24 hours to reverse debit entries
arising from failed transaction attributable to system-
related issues.
The directives were contained in a 14-page ‘Guidelines for
card issuance and usage in Nigeria’ released by the Banking
and Payment System Department of the CBN on Tuesday.
The CBN guidelines read, “Any trapped card in the ATM shall
be rendered unusable (by perforation) by the acquirer and
returned to the issuer on the next working day.
“All debit entries arising from failed transactions
attributable to system-related issues must be auto-reversed.
Where auto reversal is not feasible, manual reversal must be
carried out within 24 hours.”
“The security of the payment card shall be the responsibility
of the issuer and the losses incurred on account of breach of
security or failure of the security mechanism shall be borne
by the issuer, except the issuer establishes security breach on
the part of the card holder.”
Consequently, banks are to ensure ATM cards are issued from
card schemes that have demonstrable fraud management
systems.
Specifically, the CBN guidelines said banks were to ensure
they deploy “robust fraud monitoring tools that have the
capacity to monitor customer transaction trends, real -time
operations and option of blocking suspicious transactions.”
The guidelines further read, “Liability shift rules shall apply
when Nigerian issued EMV cards are used fraudulently on
EMV compatible terminals where magnetic stripe fallback is
enabled, or at non-EMV compatible terminals where the
transactions is read as a fully magnetic stripe transaction.
“Card issuers are required to monitor their card production
procedures to ensure that their EMV cards are properly
produced. The issuer shall take full liability for any fraud
from a fall back transaction that occurred as a result of
improperly produced chip card.”
The central bank said the new guidelines were introduced to
enable financial institutions and card processors to upgrade
their card operations to ensure optimum security and
customer friendliness, among others.
In the application of customer fees for services rendered,
banks were to be guided in their operations by the CBN’s
‘Guide to bank charges’.
“Card issuers are expected to continuously educate
cardholders on the following, among other things: security tips
for safeguarding cardholder information; costs and charges
associated with owning and using a payment card; contact
numbers to the card issuer’s 24/7 contact centre in order to
report cardholder issues or problems; dispute resolution
process across the bank’s products and channels,” the CBN
said.