Business - News - March 14, 2021

POS merchants want CBN to criminalize false chargeback claims to curb fraud

Point-of-Sale (POS) merchants have asked the Central Bank of Nigeria (CBN) to criminalize false charge-back claims by operators to curb the growing incidence of fraud in the system.
Also, the merchants want the apex bank to mandate deposit money banks to reject any false charge-back claims filed with them by using the evidence already in their system.
Again, they have urged the CBN to review the six months period that allowed cardholders to lodge complaints about transactions on their platforms as well as the 48 hours response time allowable for merchants to respond to claims of charge-backs.
While proposing that cardholders should be allowed a maximum of one month period to file for charge-back claims, the merchants suggested they should be given between one to two weeks to defend such claims.
The call for a change in policy followed reports of a growing incidence of fraudulent charge-back claims on POS transactions in recent times.
MEDIATRACNET gathers that the extant CBN policy allows POS cardholders to lodge a chargeback claim within six months of the transaction, while the POS merchants are always allowed only 48 hours within which to defend such claims, or the merchants are automatically debited by the switch company.
It was learned that fraudulent cardholders have identified a loophole in the system which they are exploiting to their advantage
The strategy adopted by the cardholders, it was learned, has been to wait for a month or more before raising a false charge-back claim with their banks, knowing fully well that the POS merchants may not have the transaction receipt details to defend such claims, since the same may either have faded out or archived.
Consequently, POS merchants have reportedly lost millions of Naira to fraudsters through these fraudulent practices in the country.
The rise losses, it was learned, may not be unconnected with the growing public awareness of the process, making fraudsters to exploit the loopholes on daily basis with different merchant outlets using different cards.
Although they reiterated their commitment to the effort of the CBN to entrench a cashless society for the good of all Nigerians, the POS merchants what the apex bank to review the current policy and criminalize all fraudulent conduct aimed at frustrating the growth of the system.
The merchants are proposing that cardholders should have a maximum of one month to file for claims, while they should have one to two weeks to defend such claims.

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