This article (blog post) is just a part
of an insightful, informative and interesting article which will be published
in November. As soon as it is published I will put up the link to it on the
blog so keep a date with this page.
The case of BARRISTER GEOFFREY AMANO vs UNITED BANK FOR AFRICA (UBA) PLC is reported at page 114 of SLP (Section on Legal Practice) Law Journal Vol. 3, 2013 and a pdf version of the report as scanned from the journal can be found here. The SLP Law Journal is a publication of the Section on Legal Practice (SLP), Nigerian Bar Association (NBA).
Brief
Facts
Barrister Geoffrey Amano (the claimant) was a customer of UBA PLC
(the defendant). The claimant was issued with an ATM card for the operation of
his savings account with the defendant. On 11th November 2009, he
went to the bank to withdraw money and he discovered that the sum of
N149,000.00 had been withdrawn from his account without his authorization
between 6th November and 9th November 2009. The defendant
however, contended that the withdrawals were made by the claimant through the
correct use of his ATM card and PIN, or that he had authorized unknown persons
to do so with his ATM correct PIN.
The
claimant contended that the bank failed in its duty of care owed to him, which
resulted in the loss to him by the unauthorized withdrawal of the sum of
N149,000.00 from his account. The particulars of negligence were that the bank
failed to make its ATM fraud-proof; that it is only the bank that knew his ATM
card number and PIN because it is used on the bank’s machine; that it is the
duty of the bank to protect the use of ATM card from being attacked by thieves,
which remains its property; that it is the duty of the bank to carry out a
thorough investigation to unearth the fraud perpetrated against the customer
through the ATM card, and that the bank made it possible for unauthorized
persons to break into the customer’s account to steal his money.
On
the other hand, the bank contended that it had at all times exercised
reasonable measures to ensure best practice, and that no unauthorized persons
have access to and or withdraws money from accounts of its customers including The
claimant, and that the alleged withdrawals between 6th November and
9th November 2009 were all made by The claimant with his ATM card and
PIN and that the PIN was known only to him unless he had disclosed it to any
such alleged unknown persons, or had been careless in handling his ATM card and
PIN number leading to the alleged transactions. The bank also contended that
the ATM card was fraud-proof, with adequate security features to protect its
users such as the claimant.
Decision of the court
Although
the bank had submitted that the disputed transactions were done using the ATM
card and correct PIN of The claimant, it woefully failed to lead credible
evidence to show that the said ATM card and PIN were the same ones used for the
disputed transactions. The court therefore held that based on the circumstance
of the facts and evidence in the case, the withdrawal of the sum of N149,
000.00 from the account of the claimant was unauthorized, and that the bank has
the duty of care to ensure that the funds of the customer in its custody are
safe, and should only be withdrawn upon due authorization by the customer. The
bank had failed in the discharge of its duty of care towards the claimant, and
was thus liable in negligence. The court therefore ordered the bank to refund
the sum of N149, 000.00 that was withdrawn without the customer’s
authorization, and to pay to the claimant the sum of N3, 000,000.00 as general
damages for the untold hardship suffered for the unauthorized withdrawal of
funds from his account.
The
court also ordered that there should be interest on the N149, 000.00 part of
the judgement sum at the current interest rate per annum from the 9 November
2009 to the date of the judgement and thereafter, the interest rate of 10 per
cent per annum as allowed by the Rivers State High Court Rules 2010 on the
entire judgement in the sum of N3, 149,000.00 from the date of the judgement
till the entire judgement sum is finally liquidated.
OBSERVATIONS
During the cross examination of
the bank’s witness (DW1) he testified that the transactions of 6/11/2009 and
9/11/2009 were done through the use of ATM card and correct PIN of the claimant
but failed to lead or give any credible evidence to show that the ATM card and
PIN of The claimant was used for the withdrawal. At this juncture it is
appropriate to reproduce an excerpt of the DW1’s cross examination below:
Q: Exhibit A is ATM?
A: Yes.
Q: Is the defendant still using this ATM?
A: No.
Q: Why did the defendant stop its use?
A: We migrated to another platform.
Q: Why?
A: Because the Exhibit A had no name of the
account holder on it.
Q: So the ATM- Card you use now has more
security features?
A: No, the new ATM has better features.
Q: The better features are for the security of
the customer?
A: No, it is for fast and better transaction.
Q: What are the security features of the ATM?
A: Once a
customer inserts his ATM card with a wrong PIN number the ATM machine seizes
it.
Q: How
does UBA Plc, determine unauthorised withdrawals over which complaints are made?
A: Unless
the customer compromises his PIN there can be no unauthorized withdrawal by ATM
card.
Q: Look at
Exhibit D, the Defendant admitted that fraudster can guess and use PIN
illegally?
A: Yes,
but that is - usually through the internet.
Q: But the use of the internet is not in Exhibit D?
A: Yes, it
is not there.
Q: So,
since fraudster can get the pin number then unwarranted withdrawal can be made
through ATM?
A: No
the customer must have compromised his pin.
Q: It is
common knowledge in banking that a fraudster can hack into the ATM Machines?
A: I
am not aware.
Q: ATM
Machines has the capacity to capture footage of the machine?
A: Yes.
Q: Do you
have the footage of the withdrawals on 6/11/2009 and 9/11/2009?
A: No, as the withdrawals were done at other banks
which do not have footage but used the journal to know the withdrawals on those
dates.
Q: You did
not have the PIN used in those withdrawals?
A: No,
it is known only to the customer.
Q: You also do have anything to show that it was the
same PIN number of the ATM used that date?
A: No,
but it was the same ATM Card that was used.
Q: Can fraudsters guess and use PIN number of a
customer and withdraw money?
A: No,
but a person can guess the pin number of a customer and withdraw money and that
is why we usually advice against the use of easy pin numbers such as date of
birth.
The defendant in trying to prove
that the disputed transactions were done using the claimant’s ATM Card and PIN
only tendered Exhibit D1(a comprehensive statement of account of the claimant
with the defendant) whose contents were rightly disbelieved or discredited by
the court when it stated thus in the judgement:
…for
money allegedly withdrawn by the claimant or his authorized person through his
ATM Card with correct PIN number on 6/11/2009 and 9/11/2009, in Exhibit D1 not
a single fact is stated or shown as to the PIN number used and DW1 did not lead
any evidence as to how the court can see and confirm the correct PIN number
used as alleged by the defendant.
The ATM card is meant to contain
within it what is referred to as an Application Transaction Counter (ATC). The
ATC is incremented by one each time a transaction is carried out on the ATM. If
the disputed transactions were done using the claimant’s ATM card then the ATC
on it would have incremented accordingly.
The
ATM card of the customer should therefore have been subjected to a forensic
analysis to establish whether the ATC had incremented or increased in
accordance with each and every ATM transaction on the customer’s statement of
accounts, or whether there are any discrepancies. This piece of evidence
coupled with other pieces of evidence such as possible ATM camera footage,
transaction and event logs and error reports, ATM receipts (might have
confirmed that cash was physically dispensed) and all the Authorization Request
Cryptogram (ARCQ) information, would have gone a long way to establish whether
the customer’s ATM card and PIN were used by him or by someone else to make the
disputed withdrawals. Every time a chip and pin or EMV card is inserted into an
ATM, an ARQC is a generated and the Authorization Response Cryptogram is
generated by the issuer (bank) in response to the ARQC. This response includes
the decision by the bank on the authorization request and is sent back to the
card for validation before the transaction is completed. The ARQC would
therefore have shown whether the card’s chip had been read by the machine.
It
is curious why the bank did not choose to follow the path highlighted above,
but rather decided to tender only a printed statement of account which
obviously cannot be used to prove that a particular ATM card and PIN was used
to make a particular withdrawal. Perhaps if the defendant’s lawyer was
tech savvy so as to be aware of all the technical aspects involved in the
workings of the ATM card and ATM, he would have probably advised the defendant
against the tendering of a mere printed statement of account to show that a
particular ATM card and PIN was used for a particular transaction.
Computer Literacy/Technical Training
The
case of Barrister Geoffrey Amano therefore demonstrates the need for technical
training among lawyers and legal practitioners in Nigeria, especially those
involved in litigation. Legal practitioners in Nigeria need to become familiar
with or educate themselves about computers and computer-like devices and
software so as to be in a better position to handle cases involving or having
elements of software. The failure to keep up-to-date with advances in
technology and how it affects the law will sooner or later render a lawyer or
legal practitioner irrelevant at best, negligent at worst, owing to the
ubiquity of electronic communications and documentation; which has in turn elevated
electronic evidence to a position of vital importance in modern day litigation.
It is also in this regard that I wish to
observe that it is high time that the Council of Legal Education and the
National Universities Commission found a way to introduce the teaching of
electronic evidence in the universities as a core course, because as a core
course any student who fails it would not be able to graduate. This should
therefore encourage or compel law students (potential lawyers/legal
practitioners) to acquire knowledge of computer usage unlike the present
situation where many undergraduate law students are computer illiterates.
The need for lawyers to become proficient
in computer usage/ICT or to
become familiar with or educate themselves about computers and computer-like
devices and software cannot be overemphasized thus in the American case
of State v. Crabtree, S.W.3d 2012 WL
3538316, the Kentucky Court of Appeals noted thus:
We
note that this case demonstrates a need for technical training among legal
professionals. There were several instances during the trial when it appeared
that counsel for each party attempted to elicit testimony from the experts but
failed because of confusion of technical terms. In this particular case, the
evidence of guilt was overwhelming, but we anticipate that this communication
gap could be damaging in cases with weaker evidence.
I therefore commend to the
Council of Legal Education and the National Universities Commission, the words
of Denise H. Wong in her article: “Educatingfor the Future: Teaching Evidence in The Technological Age”:
The
advent of the technological age has had significant effect on litigation
practice, none more so than in the area of evidence gathering and presentation
in court. A significant proportion of evidence that is gathered for both
criminal and civil matters is now electronic in nature, and this necessitates a
change in the way that lawyers think and advise on evidential issues…rather
than simply focusing on principles relating to the admissibility of evidence in
court, the traditional course on evidence law should be modified to equip
students with an intellectual framework that conceives of electronic evidence
in litigation as an entire process. This process begins with the gathering and
forensic examination of electronic evidence, and is followed by the admissibility
of such evidence in court, ending with the effective presentation of the
evidence before a judge or jury…taking such an approach, the law teacher would
be playing the role of effective gatekeeper to the legal profession by
providing a course that is both intellectually rigorous and adequately prepares
would-be litigators for the realities of modern day practice.
Duty
to exercise reasonable care and skill
In the case under consideration
the bank’s witness was cross-examined thus:
Q: Do you
have the footage of the withdrawals on 6/11/2009 and 9/11/2009?
A: No, as the withdrawals were done at other banks
which do not have footage but used the journal to know the withdrawals on those
dates.
At this point it is instructive
to note that the Central Bank of NigeriaStandards and Guidelines on Automated Teller Machine (ATM) Operations in Nigeria provides that:
Every
ATM shall have cameras which shall view and record all persons using the machines
and every activity
at the ATM
including but not
limited to: card insertion, PIN
entry, transaction selection,
cash withdrawal, card
taking, etc. However, such
cameras should not
be able to
record the key
strokes of customers using the
ATM.
It is the law that banks owe
their customers a duty of care to safeguard customers’ funds in their custody
and where they breach that duty of care they may become liable in negligence to
their customers. In the case of ECOBANK
NIGERIA PLC v. ELDER DOMINIC EKPERIKPE (2013) LPELR-20327(CA) it was held
that it is the duty of a bank to
exercise reasonable care and skill in regard to its customer's affairs.
Now, won’t it be negligence on the part of a bank or a breach of the duty to
exercise reasonable care and skill considering the level of ATM fraud in
Nigeria; to operate ATMs without a
camera to capture photo/video footage of persons making withdrawals on the ATM or put in another way;
where a bank fails to install a camera on any of its ATMs, won’t that be
considered negligence on its part in safeguarding its customers’ monies?
Conclusion
All hope is not lost for bank
customers whose money in the bank gets missing or stolen through ATM fraud. All
they need to do is to write to the bank informing it of the stolen or missing
funds and also copy the same letter to the Central Bank of Nigeria (CBN).
The CBN circular of February 7, 2011 with reference number
BPS/DIR/CIR/GEN/02/003 and titled: Penalty for Non Compliance with CBN Circulars and Guidelines on ATM Operations in Nigeria
provides in relevant parts thus:
(a)An
ATM without a camera installed will attract a fine of N50,000 and deactivation
of the ATM until the camera is installed.
(b)An
ATM deployer will be made to refund the full amount involved in any fraud
perpetrated on its ATM for failure to provide footages on the disputed
transactions when required.
(c)Failure
to respond to the customer or to CBN on ATM complaints within 72 hours will
attract a fine of N50,000 per day for each complaint after the 72 hours until
the response is received.
(d)Failure
to resolve any ATM dispute with evidence of resolution within 14 days, the
deployer will refund the total amount involved in the fraud.
If the above option fails they
should contact a lawyer with the requisite knowledge to seek redress in a court
of law. A lawyer with the requisite knowledge in this case, according to
Stephen Mason in Electronic Banking: Protecting Your Rights; will be a lawyer who has a fair knowledge of
computers and the workings of ATMs and internet banking, a lawyer who is
knowledgeable about electronic evidence and electronic signatures, a lawyer who
knows the law in relation to electronic evidence and banking disputes.