Failed P0S Transaction & Debit Alert Without Payment: The Stance of the Law Revisited.


Consistent financial transactions are inevitable so long as we need funds to cater for our daily expenses. Undoubtedly, it is common knowledge amongst bank customers to make use of their ATM cards in making withdrawals either at the bank’s ATM machine or at the POS business centers given that there is a paradigm shift from the conventional queue system at the banking hall to the contemporary system.
POS centers are now rampant. Almost every strategic junction and street has POS centers across the states. This has encouraged bank’s customers to find them easily accessible and less time consuming to withdraw money from POS machines than going to the ATM machine or banking hall in order
to avoid long queue and save time. Often times bank customers face challenges associated with withdrawal of money from the POS machine. These challenges, ranging from failed debit or credit transactions, declined transaction etc.
The question that readily comes to mind is, what should one do when faced with a situation like this?

This is what you should do:

  1. Make a formal complaint to the bank at the customer care unit of the bank or through the
    bank’s official email address.
  2. Ensure that you provide the necessary requirements to your bank e.g the bank may request some digits of your ATM card in order to trace the transaction and resolve it. Ensure that this information is provided directly to the bank at the bank’s place of business.

Duties of the bank regarding the complaint management

  1. Develop documented processes on complaints handling that will guarantee fairness, transparency, responsiveness and independence of the complaint handling mechanism.
  2. Allocate adequate resources for complaints handling/redress and the process manned by the skilled and well-trained members of staff.
  3. At all customer engagement points, disclose channels and contact details for lodging complaints, timeframe for resolution, and options for escalation.
  4. Where it is not practicable to comply with (3) above, refer customers to where the information required could be obtained. Reg. 6.1 of CBN Consumer Protection Regulations 2019.
  5. Be effective, functional, efficient and accessible always.
  6. Generate a unique identification number and acknowledge complaints within 24 hours.
  7. Accord special consideration to the needs of vulnerable groups. Especially the physically challenged persons.
  8. Provide emergency channels for reporting time-sensitive issues. Reg 6.2 of the CBN Consumer Protection Regulations 2019.

Time Lines for Complaints Resolution by Financial Institution Regarding Failed POS Transaction.

Some banks have their internal policy & time-line for resolving POS complaint. However, in line with the Central Bank of Nigeria regulation, the financial institution has only three (3)working days for first review of the complaint and two (2) working days for second review within which to resolve this issue- which is a total of 5 working days and NO MORE!
Penalties for Violation of the Aforesaid Guidelines by Financial Institutions. There are divergent possible outcomes in terms of sanctions that a bank faces over failures relating to failed POS transactions:

  1. Non-resolution of complaints within five (5) working days attracts a penalty of #500, 000,00 per complaint per week while the infraction subsists.
  2. Non-acknowledgment of complaints from the customer or non-issuance of tracking numbers attracts a penalty of #2,000,000.00. Persistent breach of regulations attracts administrative sanctions on the responsible officer(s), including issuance of warning letters and any other statutory sanctions on the officer(s) or institution which may be in addition to the sanctions prescribed above.

The Central Bank of Nigeria being a regulatory body that regulates all financial institutions makes regulation that is consumer friendly and seeks to protect the interest of the customers. In the light of the foregoing, banks are enjoined to comply strictly with CBN directives regarding POS-related
issues in order to ameliorate foreseeable financial inconveniences that may be meted on customers.. Failure by Banks to comply with CBN regulations the bank risks the consequence of being sanctioned by the Central Bank of Nigeria. In addition, a customer may institute an action in court against the
bank for the failure of the bank to dispense cash through the POS. The rationale behind this is that the ATM card issued by a bank is akin to a cheque and must be honoured on request so long as there are sufficient funds in the customer’s account, and failure to do so means the bank is in breach of duty of care owed to its customer. Therefore, the customer is entitled to damages whilst also seeking redress for the refund of the debited fund alongside. The court applied this reasoning in the case of Jwan V Ecobank (2021) 10 NWLR (PT.1785)449 at 485. Though the fact of this afore
cited case involves non-dispensation of cash by an ATM machine upon request by a bank’s customer wherein the court awarded damages against the bank.

Article by Thyword Nnadi (Associate Nakudu Law Partners)


This article is only intended to provide general information on the subject matter and
does not by itself create a client/attorney relationship between readers and our Law Firm or serve as
legal advice.

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