LEGAL ALERT: The Court has held that, in digital banking, the customer bears the loss for any monies wrongly taken out of their account if the bank can show that its security procedure has a commercially reasonable method of providing security against unauthorised payment orders.
Court also held Financial institutions offering mobile banking are thus obliged to provide secure mechanisms for their customers to conduct their banking safely online.
Court also found that banks have a duty to put in place robust fraud detection and prevention mechanisms, update digital banking technology, identify suspicious transactions and trace and check transactions over their digital banking platforms.
the bank should provide the customer with regularly updated information on how to access digital
banking services, including details about their customer ID, selection of appropriate passwords and the availability of additional authentication or security options.
banking services, including details about their customer ID, selection of appropriate passwords and the availability of additional authentication or security options.
The bank should also take care to guide electronic banking users on how to keep their accounts secure, how and when they will be responsible for fraudulent withdrawals and take special interventions to assist elderly citizens.
Customers on the other hand have a duty to always keep their banking information, user IDs, passwords and PIN numbers confidential.
The court held that in instances of fraud over digital banking platforms, the loss will be shouldered by the party who could have most prevented it. If the bank security system is sufficient and was used, the customer will hear the loss.
Case: Aida Atiku v Centenary Bank.
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