A GREAT DAY FOR ATM USERS IN NIGERIA

In February, 2016, a customer of FCMB Ltd tried to withdraw the sum of N8,000 from the ATM of UBA Plc. The ATM dispensed cash but before he could take it, the cash was retracted, nevertheless N8,000 was deducted from his account with FCMB Ltd. Efforts by the customer to get a refund of the N8,000 failed, as UBA insisted that the ATM paid him. The customer thereafter sued both banks for breach of contract and negligence.

In the case: Barr. Timothy Tion v FCMB Ltd and UBA Plc (MHC/161/16), filed at the Benue State High Court on Friday 13^th May, 2016, the Plaintiff (customer) asked the court for the following reliefs:

(i)                        A declaration that the debit of the Plaintiff’s account to the tune of N8,000.00 only (Eight Thousand Naira) even as he got no value for the transaction amounts to a breach of contract by the Defendant’s jointly and severally.

(ii)                    A declaration that the debit of the Plaintiff’s account to the tune of N8,000.00 only (Eight Thousand Naira) when he got no value for the transaction amounts to negligence by the Defendant’s jointly and severally.

(iii)                 An order directing the Defendants jointly and severally to forthwith refund the sum of N8, 000.00 only (Eight Thousand Naira) debited from the Plaintiff’s account in spite of the fact that the ATM which the Plaintiff carried out the transaction partially dispensed cash but retracted the cash before the Plaintiff could take it.

(iv)                  An order awarding to the Plaintiff against the Defendants jointly and severally damages of N10, 000.00 (Ten Million Naira) for the untold hardship and inconveniences suffered by the Plaintiff as a result of the unlawful conduct of the Defendants.

(v)                      10% Per Annum as allowed by the High Court of Benue State (Civil Procedure) Rules 2007 on the entire judgement sum from the date of judgement till the entire judgement sum is finally liquidated.

UBA in rejecting the Plaintiff’s claim tendered in evidence ATM Electronic Journal Logs, ATM Camera Snapshots, CCTV Footage and Snapshots whereas FCMB did not tender any evidence in disproving the Plaintiff’s claim but only argued that they acted on a debit alert sent to them via Interswitch network by UBA to deduct N8,000 from the Plaintiff’s account and that they have they have their own ATMs yet the Plaintiff chose to use that of UBA.

In entering judgement for the Plaintiff the court found that UBA failed to show that the ATM paid to the Plaintiff the amount he set out to withdraw. The court also found FCMB liable for breach of contract and negligence for acting on the debit alert from UBA without ensuring that Plaintiff was actually paid. The court equally found UBA negligent for causing the Plaintiff’s account to be debited, even when the ATM failed to pay him the cash he had requested to withdraw.

According to His Lordship Justice S. O. Itodo who delivered judgement in the case on September 26, 2018:

“There is no doubt, that between the plaintiff and the 1^st defendant, a Banker/customer relationship exists by a contract. The plaintiff’s case that he was not paid was not disputed by the 1^st defendant which contend that it took steps to unravel the issue and resolve same, and that the debit of the plaintiff's account was caused by the 2^nd defendant. Granted that the 1st defendant was not directly responsible for the deduction of the plaintiff's account but that it acted on a signal or alert from a third party which is the 2^nd defendant, what step did the 1^st defendant take to ascertain the genuineness of the alert from the 2^nd defendant. In other words, did the 1^st defendant verify the alert sent to it before deducting or debiting the plaintiff’s account? There is no evidence by the 1^st defendant of the steps it took (if any) to ensure that the plaintiff was paid the sum of money he set out to withdraw other than the electronic message it received before debiting the account. It is not its case, that this electronic message was fool proof and admit of no error or that there could not be mechanical failure in its operation.

His Lordship also stated that:

“The 2^nd defendant’s witness in his oral testimony did not adduce evidence showing which of the exhibits identified the plaintiff, which of them showing the transaction, and which of them which show the payment of the money to the plaintiff. The court not being a party to the dispute cannot be expected to do that for the defendant. Even though the court may not do so but nonetheless did, that exercise did not show, and therefore disprove the plaintiff's assertion that he was not paid. In any case the 2^nd defendant is mindful that the ATM operation may not in all cases be without controversy and dispute such as there is in the present case, hence it went the extra mile to install cameras whose photographs are exhibits tendered by it. However as has been demonstrated, the pictures have not shown that the plaintiff was paid the money he went out to withdraw. In the circumstance, the 2^nd defendant, just like the 1^st defendant, cannot say that it was not negligent in ensuring that the plaintiff was paid, as a duty of care was created by virtue of the 2^nd defendant displaying and making its ATM available to the banking public and not only its customers.”

In conclusion His Lordship held that:

“…the plaintiff established and proved his case that the defendants were negligent in not ensuring that he was paid before deducting or debiting his account. Consequently Judgment is entered in his favour in terms of reliefs 46(1)(ii) (iii) and (v) while a further sum of Five Hundred Thousand Naira (N500,000.00) is awarded for the hardship and inconveniences suffered by him.”

This decision, unlike the one in Kume Bridget Ashiemar v. GT Bank Plc and UBA Plc, is a welcome relief to many bank customers in Nigeria who have experienced ATM dispense errors and failed to get a refund. It also demonstrates that customers can sue banks in such cases and get justice. The decision should therefore serve as a source of courage to bank customers in Nigeria who wish to sue errant banks.  Until the banks are sued and decisions given against them, the sole efforts of their regulator, the Central Bank of Nigeria, in ensuring that they serve their customers better may not be enough.

ATM DISPENSE ERROR: COURT FIXES DATE FOR JUDGEMENT

In 2016 a lawyer sued FCMB Ltd and UBA Plc over ATM partial dispense error. The lawyer had tried to withdraw the sum of N8,000 from his account with FCMB on UBA ATM, the machine partially released cash but before he could pick it up, the cash was retracted by the ATM. FCMB refused to make a refund after a request by the lawyer on the grounds that the transaction was successful according to UBA. In the course of trial, UBA provided ATM Electronic Journal and CCTV video footage and ATM camera still photos, which only showed the lawyer standing by the ATM but did not show him picking money from the machine, to prove that the ATM presented the sum of N8,000 which was taken by the lawyer.

On the 13th of July, 2018 the Final Written Address of parties in the case were adopted. The case was then adjourned to 21st of September, 2018 for judgement. This is hoping that the court will enter judgement in favour of the customer so as to give other multitude of customers who have suffered a similar fate at the ATMs of banks in Nigeria, the courage to seek redress in a court of law where the bank refuses to reverse the failed transaction and make a refund to the customer.

DOWNLOAD A COPY OF THE JUDGEMENT IN ATM DISPENSE ERROR CASE

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On the 24th of May, 2018 a Benue State High Court, sitting in Makurdi, delivered judgement in the case of of KUME BRIDGET v. GTBANK PLC & UBA PLC (SUIT No. MHC/198/14). A case that has been reported as the "First Nigerian Case on ATM Dispense Error". A copy of the judgement has been obtained and can be downloaded here and here. Please download, read and make your comments and suggestions in the comments section of this page or send them to timoteetion@gmail.com.

UPDATE AND MY INITIAL OPINION ABOUT THE JUDGEMENT IN KUME BRIDGET vs GTBANK PLC & UBA PLC

INTRODUCTION

A Benue State High Court of Justice, sitting in Makurdi, today the 24^th of May, 2018, delivered judgement in the case of KUME BRIDGET v. GTBANK PLC & UBA PLC (SUIT No. MHC/198/14). The case involved a claim of failed ATM transaction as alleged by the plaintiff  and it was probably the first Nigerian case to seek to address the failure of ATM to dispense cash as other ATM cases had dealt with unauthorized ATM withdrawals. In unauthorized withdrawals the customer goes to the bank or ATM to make withdrawals and then learns that certain amount has been debited from his account or he is in possession of his ATM card and suddenly receives debit alerts on his account while in non-dispense or partial dispense of cash, the customer has sufficient funds in his account, attempts to make a withdrawal and the ATM does not dispense cash but his account is debited or dispenses less cash than that requested by the customer.

BRIEF FACTS OF THE CASE

The Plaintiff sometimes in October, 2013 attempted severally to withdraw money from the ATM of 2^nd Defendant but according to the plaintiff the ATM failed to dispense cash nevertheless her account was debited. The Plaintiff claimed that on she had on 2^nd October, 2013 withdrawn money and her account balance showed N95, 213.07. However, when she attempted to withdrawn N20,000.00 only on 3^rd October, 2013 the machine displayed a message that she had insufficient funds. She further tried withdrawing N20,000.00 twice but the same message displayed. She left the ATM and came back to the same ATM on 4^th October, 2013 to withdraw N20,000.00 and then N10,000.00 but the same message of the previous day was displayed. According to the Plaintiff she was engaged in some other pressing engagements so she was only able to make a complaint to her bank; the 1^st Defendant (GTBANK Plc) on 8^th October, 2013 as 5^th and 6^th were Saturday and Sunday respectively.

According to the defendants the withdrawal attempts were successful. Plaintiff disagreed and sued the Defendants. The Defendants relied on the debit entries in the Plaintiff’s Statement of Account, the ATM Electronic Journal Log of 2^nd Defendant and the ATM Camera footages to contend that the ATM of the 2^nd Defendant dispensed cash which was picked up by the Plaintiff. The 2^nd Defendant also contended that the Plaintiff is not a credible witness because she failed to instantly report the failed transaction to her bank.

DECISION OF THE COURT

The court held that plaintiff failed to prove that the ATM of the 2^nd Defendant (UBA Plc) didn't dispense cash to her the various times she attempted to make withdrawals. In reaching this conclusion the court found that the Plaintiff isn't a credible witness because she didn't report the alleged failed transactions until after 5 days. The court also relied on the debit entries in Plaintiff's Statement of Account and the entries of PIN entered, Cash Presented and Cash Taken recorded in the 2nd Defendant's ATM Electronic Journal logs regarding the Plaintiff's withdrawal transactions. The court further reasoned that the documentary evidence namely; the statement of account and ATM Electronic Journal log supersedes the oral evidence of the Plaintiff that she didn't get money from the ATM of 2nd Defendant.

The court in the judgement said it sympathised with the Plaintiff but that court judgements are based on law and evidence and not on sentiments.

OPINIONS

I had the opportunity of reading through ALL the processes filed in the case. In appraising the evidence in the case the court failed to consider the inconsistent entries in the ATM journal logs and the fact that both the 1st and 2nd Defendants' witnesses admitted under cross examination that entries or record of transactions in the ATM journal aren't always accurate or error proof, meaning that the court ought not to have attached much weight to such a piece of evidence that is not reliable even though it is documentary evidence, which is held to be superior to oral evidence.

The court also didn't appraise the ATM camera footage presented by the 2^nd Defendant which didn't show the ATM of 2nd Defendant dispensing cash and the Plaintiff picking up the said cash. In fact the ATM camera images (still photos and not video recording) were so blurred that one could not make out the person in the photo and whether it was in front of an ATM, let alone the ATM of the 2nd Defendant). 

The court also failed to consider the admission under cross examination of both defendants’ witnesses that the Central Bank of Nigeria (CBN) in 2014 directed banks to refund to customers, monies trapped in ATMs as a result of ATM non-dispense or partial dispense errors.

POSERS

How can a bank customer be expected to successfully prove that the ATM of a bank didn't pay her cash when she attempted a withdrawal transaction but her account was nevertheless debited and the debit was recorded in her statement of account? On whom should the burden of proof lie in such a case? Who has  superior access, control and custody of evidence of a successful ATM withdrawal transaction; the bank customer or the bank? 

SOLUTIONS/ANSWERS TO POSERS

All you readers are enjoined to attempt answers or provide solutions to the posers above. After all, Anton Chekov, once said: “The task of a writer is not to solve the problem but to state the problem correctly.” I have stated the problem correctly so you readers provide answers. 

CONCLUSION
The judgement is a sad one for the multitude of ATM users in Nigeria who suffer from ATM non-dispense or dispense errors and which even the Central Bank of Nigeria is aware of and once directed the banks to refund  to customers, monies trapped in banks' ATMs due to partial or non-dispense errors. About two years after the initial directive by the CBN issued in 2014, it was reported that "inundated by complaints from bank customers over delays and most times non-reversal of dispense errors encountered during electronic transactions, CBN has said it will start monitoring banks to ensure that dispense errors are automatically reversed and the account of the customer credited."

FAILED ATM TRANSACTION CASE: UBA WITNESS TESTIFIES, CASE ADJOURNED FOR ADOPTION OF FINAL WRITTEN ADDRESS

The Defence specifically, the 2^nd Defendant (UBA Plc.), closed their case today in the very important test case of KUME BRIDGET ASHIEMAR v GT BANK PLC. &UBA PLC. (SUIT No. MHC/198/14). The case involves a claim of failed ATM transaction as alleged by the plaintiff  and it is probably the first Nigerian case to seek to address the failure of ATM to dispense cash as other ATM cases had dealt with unauthorized ATM withdrawals.

The Plaintiff sometimes in October, 2013 attempted severally to withdraw money from the ATM of 2^nd Defendant but according to the plaintiff the ATM failed to dispense cash nevertheless her account was debited. According to the defendants the withdrawal attempts were successful. Plaintiff disagreed and sued the Defendants.

The Plaintiff opened her case, testified and was cross-examined, while the 1^st Defendant opened their case on Thursday, 22^nd June, 2017 calling their sole witness who testified and was cross-examined. The case was then adjourned to 20^th July, 2017 for 2^nd defendant to call their own witness to testify. On 20^th July, 2017 the court did not sit. The case then suffered several adjournments between 20^th July, 2017 and 9^th November, 2017 owing the court going on its annual vacation and strike action by the Benue State civil servants.

However, today, 9^th November, 2017, the 2^nd Defendant proceeded to call her sole witness who testified and was cross-examined, after which the case for the Defence was closed. The case has now been adjourned to 21^st December, 2017 for adoption of final written address. After the adoption of final written address the case would be slated for judgment. Whatever the court decides will go a long way in developing Nigerian law with regards to failed ATM transactions.

UPDATE ON FAILED ATM TRANSACTION CASE

The very important test case of KUME BRIDGET ASHIEMAR v. GT BANK PLC. and UBA PLC. (SUIT No. MHC/198/14) is steadily making progress at the High Court of Justice of Benue State of Nigeria specifically High Court No. 7, sitting in Makurdi. The case seeks to address a trend which has bothered many bank customers in Nigeria. The case involves a failed ATM transaction or ATM non-dispense error as alleged by the plaintiff  and it is probably the first Nigerian case to seek to address failure of ATM to dispense cash as other ATM cases had dealt with unauthorized ATM withdrawals.

The plaintiff sometimes in October, 2013 attempted severally to withdraw money from the ATM of 2^nd defendant but according to the plaintiff the ATM failed to dispense cash nevertheless her account was debited. According to the defendants the withdrawal transaction was successful. Plaintiff disagreed and sued the defendants.

The plaintiff opened her case and testified while the 1^st defendant opened their case on Thursday, 22^nd June, 2017 calling their sole witness who testified and was cross-examined. The case has been adjourned to 20^th July, 2017 for 2^nd defendant to call their own witness to testify.

ANOTHER METHOD OF STEALING CASH FROM ATMs

My article: ANOTHER METHOD OF STEALING CASH FROM ATMs has been published in the Digital Evidence and Electronic Signature Law Review. The article as the title suggests, deals with a method of stealing cash from ATMs, which is not widely known. I implore you to read it and get informed. 

EMPLOYEES OF NIGERIAN BANKS AND THEFT OF CUSTOMERS' MONIES

It has been reported in the US that bank tellers (i.e. an employee of a bank, whose job includes the responsibilities of helping the bank customers with their banking needs, such as depositing a check or making a withdrawal, etc) pose a rising security risk. According to the report in the New York Times:

"As concerns over identity theft and foreign cyber attacks rise, customers are largely in the dark about a growing threat just around the corner: bank tellers and managers with instant access not only to their critical personal information, but also to their cash.

Though much of the focus on bank fraud has been on sophisticated hackers, it is the more prosaic figure of the teller behind the window who should worry depositors, according to prosecutors, government officials and security experts."

The report further states that the Manhattan District Attorney's office approximately files at least a case a month against a bank teller. This indicates that such cases of theft are now common place in Manhattan. In view of the foregoing, the report by Sahara Reporters highlighted below should be a cause for worry to many Nigerians, although in Nigeria the scale of theft of customer's monies by bank employees is unclear or unknown.

According to Sahara Reporters “The management of United Bank for Africa (UBA) Plc has ordered nine of the bank's employees to refund N1, 551, 000 before March 30, 2017; these were monies they stole via Automated Teller Machine (ATM) transactions.”

Furthermore, the report states that the order to refund the said monies was allegedly conveyed through the bank’s internal email which is quoted thus:

"Sequel to the huge ATM shortage of N1,551,000 (One Million, five hundred and fifty-one thousand naira only) in your BO, which was as a result of your negligence to assigned tasks, you are hereby required by Executive Management to pay the amount listed against your name to recoup this loss."

It is not really clear from the Sahara report if the said loss of money was as a result of theft or negligence. Whether it is negligence or theft by the employees, the report did not state how the money was lost but just that they stole the monies via ATM. How did they steal it via ATM?

In other climes this would have spurred the banks’ regulator, in Nigeria, the Central Bank of Nigeria to issue a statement on this report. The bank itself, UBA several days after the report has neither come out to deny or confirm the story or clarify any issue reported in the story. Since the report did not say how the money was stolen through the ATM by the employees we are left to speculate on how they reportedly stole the monies via ATM.

One way through which bank employees, especially the ATM custodian who is a bank staff that maintains an ATM, is responsible for loading cash into the ATM and also checking that the notes are not torn, damaged or dirty, etc., can steal money via ATM is to take from cash meant to be loaded into the ATM or excess cash left in the ATM as a result of ATM partial or non-dispense error.

In the case of AJIBOYE vs. FEDERAL REPUBLIC OF NIGERIA ((2014) LPELR-24325(CA), the appellant as ATM custodian and employee of GT Bank Plc, GRA, Ilorin branch, was convicted and sentenced for theft and criminal breach of trust of the sum of N25,000,000.00 belonging to his employers, entrusted to him and meant for loading and dispense at ATMs in the bank. He appealed against the conviction and sentence but his appeal was found to be lacking in merit and consequently dismissed. In his confessional statement he stated how he carried out his criminal acts and same is reproduced at page 47 of the judgement thus:

"My modus operandi. During weekends I will go to office with the pretext to load cash into ATM and at this point I will take money into the cash bag that contain (sic) the keys of the ATM. I will take the cash into my car parked outside the branch. Also during weekdays I took part of the cash unload, from the machine and deposit (sic) them into my sister (sic) account and wife (sic) account." (underlining for emphasis)

What did Ajiboye mean when he said: “…Also during weekdays I took part of the cash unload, from the machine…?” Was he referring to cash that failed to dispense or “unload” as a result of ATM non-dispense or partial dispense error?

The ATM custodian as part of his duties verifies cash in the ATM by checking the available cash balance against ATM Electronic Journal records. Electronic Journal is usually an accurate historical data of transactions that are executed on the ATM as it is programmed to capture every aspect of withdrawal transaction from the beginning to the close thereof. If there are discrepancies between the physical cash in the machine, the physical cash would be removed and kept in a separate account. Discrepancies do occur when the ATM fails to dispense cash due to a system failure, glitch or error but the ATM Electronic Journal records that cash was dispensed during a withdrawal transaction. For instance if 10 million Naira was loaded into the ATM and at the end of the day when reconciling and verifying the physical cash in the ATM it is observed in the Electronic Journal that 9 million Naira was dispensed which should leave the balance of 1 million Naira, however physical cash verification shows that 1.2 million Naira is left in the ATM. This discrepancy means that certain withdrawals failed but the Electronic Journal failed to record them as failed or unsuccessful or non-dispense of cash but instead captured them as successful withdrawal transactions. The question then is would the ATM custodian be honest enough to report such discrepancy or will he take such excess cash in the ATM cassette knowing that the electronic journal which is the evidence to be used by the bank in case of a demand by a customer who suffers ATM non-dispense error, is showing that all withdrawal transactions were successful and cash was dispensed?

It appears from the records in the case of Ajiboye earlier cited that he was not honest and regularly took the excess cash (I think this is what Ajiboye meant by “unload cash”) in the ATM cassette and deposited same in his sister’s and wife’s account. In Ajiboye’s words he said: “during weekdays I took part of the cash unload, from the machine and deposit (sic) them into my sister (sic) account and wife (sic) account."

Could this be the method through which these UBA Plc employees allegedly stole moneys from ATM as reported by Sahara Reporters?

In ideal situations when cash does not get dispensed due to mechanical failure of the ATM, the cash gets collected in a separate cassette or tray in the ATM which after periodical physical balancing by the ATM custodian is kept in a sundry account of the acquiring bank (bank whose ATM has been used). Once a chargeback is raised by the issuing bank (customer’s bank) on receipt of complaint from the customer, the amount is reversed and the customer gets back the credit. Simply put, a chargeback in this instance is a reversal of an ATM transaction which is usually initiated by the bank who issued the ATM card as requested by the cardholder (customer of the issuing bank).

However, this ideal situation does not occur all the times. For this reason many Nigerians have suffered from ATM non-dispense or partial dispense error when they tried to withdraw money from the ATM. ATM non-dispense error is a situation where a customer performs an ATM withdrawal and his account is debited but cash is not dispensed and in the case of partial dispense error cash is dispensed but not all of the cash the ATM user requested to withdraw. Although in majority of cases these errors are auto reversed or reversed within a few days after occurrence. In fact, according to paragraphs 1.3(v and w) of the CBN’s Guidelines on Operations of Electronic Payment Channels in Nigeria, 2016, acquiring banks  are to  reconcile  and  refund  all  funds  in  their  possession, belonging  to  customers  as  a  result  of  ATM’s  non-dispense  and  partial dispense errors and to also install appropriate mechanism to immediately initiate refunds without the prompting of the issuing bank or the customer.

There are also instances where no reversal is made as occurred in the case of KUME BRIDGET ASHIEMAR vs. GUARANTYTRUST BANK PLC (GTB) & UNITED BANK FOR AFRICA (UBA) PLC, Suit No: MHC/198/14. The plaintiff attempted several times to withdraw money via ATM, the ATM did not dispense cash nevertheless her account was debited and all efforts to get the defendants to reverse the debits and refund her monies proved unsuccessful. The case is currently being tried at the High Court of Justice of Benue State sitting in Makurdi.

As earlier stated a lot of Nigerians have suffered from non-dispense or partial dispense error and this caught the attention of the Central Bank of Nigeria (CBN) hence in 2014 the apex bank issued a circular with ref no. BPS/DIR/CIR/01/008 dated 11/6/2014 entitled: Non-Refund of Monies to Customers Short-changed by ATMs’ Non-Dispense or Partial Dispense Error; directing all deposit money banks to refund to customers all monies trapped in ATMs due to non-dispense or partial dispense error.

Another method through which bank employees can steal customer’s money is to gain access to customer personal information, create a fake ATM card in the name of a customer and use it to withdraw money from the customer’s account. Thus it was reported by the Bangkok Post that: “Mr Direk (who) had worked for the TMB for more than 10 years…would use financial and personal information of bank customers to make ATM cards and then withdraw money from their accounts. The suspect carried out his crime spree for four years, causing the TMB more than 40 million baht in losses.”

In another reported method, the ATM custodian can load half of the cash and keep the rest for himself‚ replacing the other half with fake bank notes.

In conclusion it is submitted that UBA explains to Nigerians what exactly happened (theft or negligence) and what measures have been put in place to forestall future occurrences of theft of customers’ money by their employees through ATM or loss of customers’ money through ATM due to negligence of their employees to assigned tasks. This is a delicate matter that affects the confidence of bank customers in the banking sector and should not be allowed to go into oblivion without proper explanations.

ATM DISPENSE ERROR: COURT RULES THAT THERE IS CAUSE OF ACTION AGAINST FCMB ALTHOUGH ATM USED WAS THAT OF ANOTHER BANK

FCMB Ltd and UBA Plc were sued in May, 2016 by Barrister Timothy Tion; customer of FCMB Ltd, over non-dispense of cash when he attempted to withdraw money at the ATM of UBA Plc in February, 2016. The defendant banks filed their respective statements of defence in response to the suit by Barrister Tion. The 1^st defendant (FCMB Ltd) also filed a preliminary objection urging the court to strike off its name from the case as the plaintiff has not disclosed any cause of action against her on the ground that the ATM where the disputed transaction occurred belongs to 2^nd defendant (UBA Plc.) and not FCMB Ltd. Specifically, the 1^st defendant in her P.O. contended:

1.That  the  transaction  that  gave  rise  to  this  suit  took  place  at  the ATM  Stand  of  the  2^nd  defendant  and  not  the  1st  defendant’s  as clearly  stated  in  paragraph  5  of  the  statement  of  claim.

2.  That  the  1^st  defendant  has  its  ATM Stand  for  the  use  of  its  various customers  including  the  plaintiff  and  the  plaintiff  wilfully  decided  to  use  the  2nd  defendant’s  ATM.

3.  That  the  report  from  the  2^nd defendant  showed  that  the  2^nd defendant’s  ATM  paid the plaintiff the  said  N8,000  and the  1^st defendant  passed  same  information  to  the plaintiff.

4.  That  there  is  no  paragraph  of  the  statement  of  claim  that  disclosed a cause  of  action  against  the  1^st defendant  in  this  suit.  This  can  be clearly shown from Paragraphs  5  to  46  of  the  statement  of  claim particularly  paragraphs  30  and  32  of  it.

The plaintiff also filed a reply in response to the P.O. filed by 1^st defendant. Hearing of arguments of parties on the P.O. took place on the 17^th October, 2016. The court on 27^th October, 2016 dismissed the preliminary objection. Itodo J. on page 3 of the ruling stated thus:

The plaintiff, see paragraph 6’and 7 of his statement of claim, said that even though the 2nd defendants ATM. produced the sum of N8 ,000.00, which he viewed, before he could reach out to collect same, the machine retracted the money into its bowels, but nonetheless the 1^st defendant debited his account with it upon report to that effect from 2^nd defendant.        It is clear that the plaintiff is saying that he was not paid the sum and that the 1^st defendant ought not to have debited his account as the report to that effect from the 2^nd defendant to it was incorrect. It, of course stands to reason that if the plaintiff was indeed not paid his account should not be debited. This in my view appears to be the basis for suing the 1st defendant. On the other hand, if the plaintiff was paid, then he has no case against either of the defendants. It may be added that it was immaterial where the plaintiff chose to carry out his transaction.

The Plaintiff is to file his replies to the statements of defence filed by the defendants and his additional statement on oath after which a date would be fixed for pre-trial conference.

ATM DISPENSE ERROR: FCMB DENIES LIABILITY ON THE GROUND THAT ATM USED DOESN'T BELONG TO THEM

It would be recalled that FCMB Ltd and UBA Plc were sued in May, 2016 by Barrister Timothy Tion; customer of FCMB Ltd, over non-dispense of cash when he attempted to withdraw money at the ATM of UBA Plc in February, 2016.

The defendant banks have filed processes in response to the suit by Barrister Tion. Both defendants filed an application for extension of time to enable them file their memoranda of appearance and statements of defence out of time. The 1^st defendant (FCMB Ltd) also filed a preliminary objection (P.O.) urging the court to strike off its name from the case as the plaintiff has not disclosed any cause of action against her on the ground that the ATM where the disputed transaction occurred belongs to UBA Plc and not FCMB Ltd. Specifically, the 1^st defendant in her P.O. contends:

1.That  the  transaction  that  gave  rise  to  this  suit  took  place  at  the ATM  Stand  of  the  2^nd  defendant  and  not  the  1st  defendant’s  as clearly  stated  in  paragraph  5  of  the  statement  of  claim.

2.  That  the  1^st  defendant  has  its  ATM Stand  for  the  use  of  its  various customers  including  the  plaintiff  and  the  plaintiff  wilfully  decided  to  use  the  2nd  defendant’s  ATM.

3.  That  the  report  from  the  2^nd defendant  showed  that  the  2^nd defendant’s  ATM  paid the plaintiff the  said  N8,000  and the  1^st defendant  passed  same  information  to  the plaintiff.

4.  That  there  is  no  paragraph  of  the  statement  of  claim  that  disclosed a cause  of  action  against  the  1^st defendant  in  this  suit.  This  can  be clearly shown from Paragraphs  5  to  46  of  the  statement  of  claim particularly  paragraphs  30  and  32  of  it.

The plaintiff has filed a reply in response to the P.O. filed by 1^st defendant and the 1^st defendant has also filed a reply on points of law to the plaintiff’s reply.

Hearing of the applications and the P.O filed will take place on the 27^th September, 2016.

This case appears to be a test case with regards to ATM transactions or electronic banking in general in Nigeria as it deals with a novel situation which appears not to have been dealt with in other cases of disputed transactions by the courts in Nigeria.

Whereas, other cases of disputed ATM transactions decided by the courts in Nigeria, namely; UBA Plc v Yahuza (2014) LPELR-23976 (CA), Archibong v First Bank of Nigeria Plc (2014) LPELR-22649(CA), Benjamin Agi v. Access Bank Plc (2014) 7 BNLR 23 CA, Victor Ejeh v UBA Plc (unreported) Suit No MHC/323/2010, judgment delivered on 3^rd of February, 2012 by Igoche, J. at the High Court of Justice of Benue State of Nigeria, Barrister Geoffrey Amano v UBA Plc (Suit No PHC/257/2011), judgment delivered on 22^nd April, 2013 by Georgewill, J. at the High Court of Justice of Rivers State of Nigeria, and Joseph v Unity Bank Plc (unreported) Suit No MHC/412/2013, judgment delivered on 22^nd of December, 2015 by Kakaan, A. at the High Court of Justice of Benue State of Nigeria, involved unauthorized withdrawals which the plaintiff customers only became aware when they attempted to make withdrawals, the case of Barrister Tion and that of Kume Bridget Ashiemar v GTB Plc & UBA Plc, Suit No: MHC/198/14, currently being tried before High Court No. 7 of the High Court of Justice of Benue State, involves non-dispense of cash by the ATM.  

In unauthorized withdrawals the customer goes to the bank or ATM to make withdrawals and then learns that certain amount has been debited from his account or he is in possession of his ATM card and suddenly receives debit alerts on his account while in non-dispense of cash, the customer has sufficient funds in his account, attempts to make a withdrawal and the ATM does not dispense cash but his account is debited.

In Barrister Tion's case the court will also have to decide on the very important issues as to whether there is any law, rule or regulation in Nigeria which prohibits a customer of a particular bank from using the bank’s ATM card to withdraw money or perform ATM transactions at another bank’s ATM and  whether if a customer of a bank uses the ATM card issued to him by his bank to withdraw money on the ATM belonging to another bank and the ATM fails to dispense money because of ATM dispense error, yet the customer’s account is debited, which of the banks should be held liable or are both banks to be jointly held liable?

For all the updates involving these two very important and epoch making cases i.e. the case  of Barrister Tion and the case of Kume Bridget Ashiermar, keep a date with this blog.

WHY WE SHOULD REJECT THE N10,000 WITHDRAWAL LIMIT PROPOSAL

It has been reported in the papers that “a proposal to limit the over the counter cash withdrawal by bank customers to N10,000 has been tabled before the Central Bank of Nigeria (CBN). The Sub-committee on Payments Systems and Infrastructure of the Bankers Committee last week sent the proposal to the CBN. The proposal was presented at the committee’s meeting but it is not clear whether it was considered. The CBN is expected to “give feedback on the request”.

The banks by the proposal want to further compel bank customers to use e-banking channels, e.g. ATMs, internet banking etc. However when there is a dispute involving transactions on any of those channels it takes a long time before they are resolved and customers often go through harrowing experiences before a resolution is reached. For instance in cases of ATM dispense errors (i.e. ATM fails to dispense cash but customer account is debited) involving the ATMs of two different banks, it takes sometimes over a month before there is a reversal of the debit and in some instances there is no reversal at all and the banks will go to court insisting that there was a withdrawal without providing conclusive evidence of such withdrawals like ATM camera footages as required by CBN guidelines. See for e.g. the cases of KUME BRIDGET ASHIEMAR vs. GUARANTYTRUST BANK PLC (GTB) & UNITED BANK FOR AFRICA (UBA) PLC, Suit No: MHC/198/14 and  BARR. TIMOTHY TION vs.FCMB LTD & UBA PLC. (Suit No. MHC/161/16), pending before the Benue State High Court of Justice, Makurdi.

Further evidence of how it takes long for ebanking disputes between banks and customers to be resolved can be found in my own case where I sent an email to the Central Bank of Nigeria’s (CBN's) Consumer Protection Department (cpd@cbn.gov.ng) over a disputed ATM withdrawal since December, 2015 and I did not get any response whatsoever from the Consumer Protection Department till date.

It is even doubtful if there are enough ATMs to service customers who will have to resort to ATM withdrawals if across the counter cash withdrawal is limited to N10,000.

I therefore, call on the CBN and bank customers to reject the proposal by Deposit Money Banks to limit over the counter cash withdrawal by bank customers to N10,000.

The following stories illustrate the suffering bank customers in Nigeria go through using e-banking channels especially ATMs:

·        ATM fraud: Customer threatens to sue GT Bank, demands

N100m damages

·        ATM Fraud … 13 Lagos Residents Lose N.7m in Two Months

·        How Kaduna residents lose huge sums to ATM fraudsters

·        Poor Handling Of ATM Fraud Cases Worries Customers

ATM NON-DISPENSE ERROR: CUSTOMER SUES GTB & UBA, CLAIMS N10M DAMAGES

A typical ATM dispense error is a situation where the machine debits a customer’s account without actually physically dispensing cash. In KUME BRIDGET ASHIEMAR vs. GUARANTY TRUST BANK PLC (GTB) & UNITED BANK FOR AFRICA (UBA) PLC, Suit No: MHC/198/14 being tried at the Benue State High Court, sitting in Makurdi, the plaintiff, Kume Bridget Ashiemar, in October 2013, attempted a total of five times(N20,000.00 thrice on 3/10/2013, N20,000.00 and N10,000.00 once on 4/10/2013) to withdraw money over two days totalling N90,000.00 at the ATM of UBA Plc. in North Bank, Makurdi. However, the ATM did not dispense cash on each attempt and displayed a message of insufficient funds yet her account was debited. She laid a complaint at her bank, GTB and requested for camera and video recordings of the transactions but none was provided and neither was she refunded the N90,000.00 In January 2014, three months later, she contacted a lawyer who wrote GTB but nothing came of the lawyer’s later.

Eventually she sued the banks and the banks in their defence are claiming that the ATM dispensed cash which was taken by her on each occasion she attempted to withdraw money on the dates mentioned above. UBA has provided ATM journal prints and transaction logs of the disputed transactions without providing visual evidence of cash dispense and pick up by Kume Bridget, to prove that the transactions were successful. The case is being tried at High Court No. 7 in the High Court of Justice of Benue State, Makurdi. The next adjourned date for the case is 27^th June, 2016.

It would be interesting to see how the court will decide the case as the same High Court No. 7 had in the case of VICTOR EJE V. UBA PLC Suit No. MHC/323/2010, awarded N500,000.00 general damages against UBA Plc in favour of the plaintiff, Victor Eje and also ordered the bank to refund the sum of N80,000.00 withdrawn from his account without his authority or mandate. The brief facts of the case are that Mr. Eje went to the bank on 30/10/2009 to withdraw N20,000.00 and he discovered he had only N1,639.00 in his account. He inquired as to why he had only N1,639.00 and he was informed that N80,000.00 was withdrawn from his account via ATM card on the ATM of Spring Bank, Ogiri Road, Enugu. Mr. Eje contended that he did not make the withdrawal neither did he authorize any person to do so with his ATM card. The bank on the other hand contended that the withdrawal was done by Mr. Eje or he was negligent and/or divulged his PIN to a third party which allowed such a third party to use the ATM card to make withdrawals. However the bank failed to prove its assertions or contentions and the court therefore held it liable for the withdrawal of the N80,000.00 since it could not prove that the withdrawal was authorized by Mr. Eje.

The Central Bank of Nigeria (CBN) in trying to check the hardship meted on bank customers due to non-dispense or partial dispense errors in 2014 issued a circular with ref no. BPS/DIR/CIR/01/008 dated 11/6/2014 entitled: Non-Refund of Monies to Customers Short-changed by ATMs’ Non-Dispense or Partial Dispense Error; directing all deposit money banks to refund to customers all monies trapped in ATMs due to non-dispense or partial dispense error. It was also reported in 2014 that several billions of Naira remained caught up in failed ATM transactions across the branches of Nigeria’s 25 deposit money banks nationwide, thus causing pain and frustration to many of the country’s 25 million bank customers.

The apex bank also in a circular dated 7^th February, 2011 with ref. no. BPS/DIR/CIR/GEN/02/003 decried the continued non-compliance by banks with CBN circulars and guidelines on ATM operations in Nigeria and also stipulated some penalties for non-compliance. Some of the penalties stipulated by the CBN include:

•  An ATM without a camera installed will attract a fine of N50,000 and deactivation of the ATM until the camera is installed.
• 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.
• Failure to resolve any ATM dispute with evidence of resolution within 14 days, the deployer will refund the total amount involved in the fraud.

Furthermore, the CBN through its Banking and Payment System Department in May, 2014, released the Guidelines for Card Issuance and Usage in Nigeria; which provides that: 

“All debit entries arising from failed transactions attributable to system-related issues must be auto-reversed. Where auto reversal is not feasible, manual reversal must be carried out within 24 hours.”