Alleged N23b Fraud: Court Urged To Compel 18 Banks To Make Refund

The Federal High Court has been asked to compel 18 commercial banks to refund about N23billion erroneously transferred in 700,000 transactions into about 8,000 accounts belonging to their customers.

The court is also urged to order the banks to provide information about the customers into whose accounts the said funds were unintentionally paid.

The requests form part of the reliefs in a suit filed by Momo Payment Service Bank Limited (MPSBL), a banking subsidiary of MTN Nigeria Communications Plc, through its lawyer, Lotana Okoli (SAN).

MPSBL is contending that, under the Central Bank of Nigeria (CBN) Regulation on Instant (Inter-Bank) Electronic Funds Transfer Services, made pursuant to Sections 2(D), 33(1)6) and 47(2) of the CBN Act 2007,it is incumbent on the banks to make refund and provide the required information.

MPSBL’s Chief Executive Officer (CEO), Anthony Usoro Anthony stated, in a supporting affidavit, that his bank suffered “a system exploitation” on May 24 this year, during which 700,000 transactions were processed with credits being made into about 8,000 accounts in the 18 banks being requested to make refund.

Anthony further stated that upon becoming aware of the incident, his organisation’s management responded by immediately shutting down the service to limit the impact and triggered engagements with the defendants (the 18 banks) through Nigeria Inter-Bank Settlement System (NIBSS) for the commencement of recovery activities from the accounts of the various beneficiaries in the various banks.

He added: “We were able, through system checks, to confirm the banks and accounts into which the various sums of money were transferred into.

“We were also able to confirm how much was paid into each bank account in total. The said list of accounts which received the funds were made available to the respective banks as a preliminary step to mitigate the applicant’s loses.

“The transfers were due to the fact that the plaintiff suffered a system exploitation which led to the said debits.

“There is no transaction between the plaintiff and the recipient account holders that warranted the transfer of the funds to those account,” he said.

Anthony added that his organisation’s resort to the court was informed by the banks’ insistence that they needed to be ordered by the court before they could act.

The MPSBL CEO also stated that his organisation was currently “carrying out investigations internally and externally to ascertain the actual cause of the debits.

“The defendant banks have requested an order of court mandating the defendant banks to reverse the credits made into their customer accounts before the defendants can do so.

“The plaintiff is entitled to a return of its money and has demanded the return of the money into its settlement account In the name MOMO PSB settlement account Number: 2041379385 held in First Bank Pic Samuel Asabia House 35 Marina, Lagos.

“It is the understanding of the plaintiff that prior to the defendant banks being informed of the fact that the credits into their customer accounts were unauthorised that some withdrawal transactions had already been carried out by some of the customers.

“This has necessitated the application for information regarding these customers and the banks and accounts to which they transferred the said funds in order to enable the plaintiff to trace the funds to those banks.

“By virtue of the provisions of the CBN Regulation on Instant (Inter-Bank) Electronic Funds Transfer Services, made pursuant to sections 2(D), 33(1)6) And 47(2) of the CBN Act 2007 the plaintiff is entitled to a return of its money and the provision of the information which it requires from the defendants.

“The plaintiff is also entitled to the support of the defendants in the recovery of any sums which have been removed from the customer accounts in the defendant banks the reliefs it is aiming in this action.”
The plaintiff is praying the court for the following reliefs:

*A declaration that the deposits of an aggregate sum of N22,300,000,000.00 erroneously transferred by the plaintiff to the accounts of the customers of the defendant banks, having been done in error, belong to the plaintiff and not the customers of the defendant banks.

*An order directing the defendant banks to each, individually, account for the sums available in their customers’ accounts and the sums which have been removed by the customers and are no longer available.

*An order directing the defendants banks to immediately return the aggregate sum of N22,300,000,000.00, less those funds that are no longer available, to the plaintiffs settlement account in the name MOMO PSB settlement account number: 2041379385 First Bank Plc Samuel Asabia House 35 Marina, Lagos, from where the funds originated.

*An order directing the defendant banks to release all information including account name information in respect of the accounts from which the plaintiff’s funds have been transferred to third parties including the destination accounts and the banks in which they are held to assist in the tracing and recovery of those funds.