A Comparative Analysis of Civil Liability in Electronic Payment Systems Under the U.S. and Nigerian Laws

Abstract

One controversial legal issue in relation to fraud in e-banking is how the losses arising from flaws in electronic payment systems would be distributed between the consumer and financial institution. The paper examines the scope of liability of the consumer and bank for unauthorised Electronic Funds Transfer (EFT) under the U.S. and Nigeria laws. Allocation of liability where a consumer is in the picture is, regulated by legal rules in the U.S. The Central Bank of Nigeria regulates e-payment liability issues through guidelines. The protection accorded the consumer by the U.S. EFT Act is wider and financial institutions share more liability than the consumer as opposed to the situation in Nigeria. Under the Nigerian law, consumers’ liability is unlimited.  Legal improvements are needed to protect the consumer as the weaker party within the context of electronic payment transfer.

Keywords: liability, risk, consumer, electronic payment system, Electronic funds transfer

DOI: 10.7176/JLPG/82-09