UNITY BANK SUED FOR UNAUTHORIZED DEBIT OF N324,000

Tersugh Wuese Nelson, a customer of Unity Bank, has filed a lawsuit against the bank, alleging unauthorized debits to the tune of N324,000 from his account. On Saturday, August 26, 2023, Tersugh woke up and discovered 12 debit transactions on his account through email notifications. These debit transactions occurred in quick succession, with 10 of them happening within two minutes on Friday, August 25, 2023, at about 11:51pm, while the other two happened at about 2:49am on Saturday 26^th August, 2023.

Upon discovering the debits, Tersugh immediately emailed the bank, stating that he did not initiate or authorize the transactions. After several email exchanges, Unity Bank informed him in October 2023 that their investigation revealed the disputed transactions were web-based, conducted using his ATM card details (PAN, PIN, expiry date, and CVV) via the Flutterwave platform as detailed below: 

The bank stated that the transactions were authenticated using Tersugh’s ATM card PIN, which only he knew, and that their review of the card activity logs did not indicate any PIN tries or changes prior to the transactions. This, the bank argued, indicated that the person conducting the transactions knew Tersugh's PIN. Unity Bank further claimed that they had reached out to Flutterwave for a possible refund, but Flutterwave declined, stating that the value was given to the cardholder.

Consequently, the bank concluded that, in accordance with CBN regulations on liability shift regarding card and PIN usage, it was not liable for the unauthorized transactions, as Tersugh's ATM card details and PIN were used to validate the transactions.

Rejecting the bank's findings, Tersugh has filed a case at the High Court of Justice in Makurdi, Benue State (Case No.: MHC/215/2024: Tersugh Wuese Nelson v. Unity Bank Plc.). He alleges that the bank was negligent in protecting his funds by failing to implement behavioral monitoring systems and robust fraud monitoring tools to detect and block suspicious transactions in real time, as required by CBN regulations.

Tersugh is requesting that the court order Unity Bank to refund the N324,000 debited from his account without authorization. Additionally, he is demanding N10 million in damages from the bank.

DUTY TO REPORT TO POLICE UNAUTHORIZED/FRAUDULENT TRANSFERS ON CUSTOMERS' ACCOUNTS

INTRODUCTION

Sometimes when bank customers in Nigeria suffer from fraudulent or unauthorized withdrawal of funds from their bank accounts, they are told by their banks to report the incident to the Police. For instance, in the case of IORPUU KELVIN MSUGHTER v. UNITED BANK FOR AFRICA (UBA) PLC, Suit No. MHC/302/18, decided by the Benue State High Court of Justice, Makurdi, Mr. Iorpuu, while at home received several debit alerts on his phone. He rushed to make a complaint to the bank the following day and after about a month the bank informed him that it was someone that transferred funds from his account and that he should make a complaint to the Police.

Is it really the duty of the customer to report such cases of fraudulent withdrawals to the Police or that of the bank? In order to answer this question, it is crucial to briefly examine the nature of the banker/customer relationship.

THE NATURE OF THE BANKER/CUSTOMER RELATIONSHIP

The account balance on your bank account is known as a demand deposit in banking parlance. The deposits are used by the banks to leverage lending. Many people mistakenly believe that their account balance shows how much they own. This is not so. Instead, it shows what the bank owes you. You merely hold a claim on cash. Therefore, bank deposits are actually loans.

Your cash forms the foundation for a banking system that loans out your account balance with the promise that they will keep some of it on hand and return all of it if you ask for it. This is called fractional reserve lending and this is what all banks do.

The old English case of FOLEY v. HILL (1848) established the legal precedent, for fractional reserve banking. In that case the court held that:

"Money, when paid into a bank, ceases altogether to be the money of the principal; it is then the money of the banker, who is bound to an equivalent by paying a similar sum to that deposited with him when he is asked for it…The money placed in the custody of a banker is, to all intents and purposes, the money of the banker, to do with it as he pleases; he is guilty of no breach of trust in employing it; he is not answerable to the principal if he puts it into jeopardy, if he engages in a hazardous speculation; he is not bound to keep it or deal with it as the property of his principal; but he is, of course, answerable for the amount, because he has contracted, having received that money, to repay to the principal, when demanded, a sum equivalent to that paid into his hands."

In the Nigerian case of WEMA BANK PLC v. ALHAJI IDOWU FASASI SOLARIN OSILARU (2007) 5 iLAW/CA/I/168/2004 it was held Per OKORO, J.C.A. (Pp. 16-17, paras. F-F) that:

“It is now settled that the relationship between a banker and customer where a bank accepts money either in current or deposit account from its customer, is a relationship of debtor and creditor. The relationship is essentially contractual. See Balogun v. National Bank of Nigeria Ltd (1978) 11 NSCC,35, Afribank Nig Plc v. A.I. Investment Ltd (2002) 7 NWLR (pt 765), 40. Now, in view of the nature of relationship between the banker and its customer and of the contract that exists between them, the customer has neither the “custody” nor “the control” of monies standing in his credit in an account with the bank. What the customer has is a contractual right to demand repayment of such monies. See Purification Tech. Nig. Ltd. v. A.G. Lagos State & 31 0rs (2004) 9 NWLR (pt 879), 665; Yusuf v. A.C.B. (1981) 1 SC 74, (1981) 12 NSCC 36. It seems to me therefore that the customer’s monies in the hands of the banker are not in the custody or under the control of the customer. Such monies remain the property in the custody and control of the banker, and payable to the customer when a demand is made. This is so because if anything happens to the money thereafter e.g. theft of the money, it is the banker and not the customer that bears the loss. Where the customer makes a demand e.g. by issuing a cheque and the banker refuses to pay, it is my view that the customer’s cause of action is in damages under their contractual relationship. See Afribank (Nig) Plc v. A.I. investment Ltd (supra).”

In a nutshell, when you deposit funds in a bank account, those funds are no longer yours!

CONCLUSION

Having briefly examined the nature of the relationship between the bank and the customer it is submitted in conclusion that money in the bank remains the property of the bank and when there is a case of its theft through fraudulent withdrawals or unauthorized withdrawals or transfers, the duty falls on the bank and not the customer, to report such theft or unauthorized withdrawal/transfer to the Police. More so, that the bank, has more information and facts regarding the movement of such funds and would therefore be in a better position to make a complaint to the Police or law enforcement agencies.

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.

RE EMPLOYEES OF NIGERIAN BANKS AND THEFT OF CUSTOMERS' MONIES

In an earlier article: EMPLOYEES OF NIGERIAN BANKS AND THEFT OF CUSTOMERS' MONIES, I quoted a New York Times report thus:

"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 stated 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 the article, I also wondered about the scale or extent of theft of customer's monies by bank employees in Nigeria and concluded that the scale is unclear or unknown. I also cited in the article, two instances of bank employees in Nigeria pilfering customers’ funds. However, it appears there are more of such cases occurring and it seems the employees of Nigerian banks are trying to catch up with their colleagues in Manhattan. This seems so because of a report in the Punch. According to the spokesperson of the Special Fraud Unit of the Nigeria Police, ASP Lawal Audu as quoted in the report:

“The work of the network provider suspects was to assist the bankers to swap the SIM cards of the targeted bank customers so that they were unable to receive alerts of any transactions on their accounts within the period that money was stolen from their accounts.

The suspects, after successful withdrawals of the money, transferred the money into about 40 different accounts to avoid being detected. They carried out their operations at weekends and public holidays so as to evade being detected by the bank monitoring mechanisms or the owners of the accounts. They defrauded their victims to the tune of over N150m.”

This fraud story by the Punch is somewhat similar to the one reported in the Times of India. In that story a bank employee stole personal details of customers, got a police report indicating that the customers’ SIM cards were lost and then requested for a SIM cards from the network providers. He then transferred from those customers accounts and they could not get debit alerts sent to their phone numbers.

For more on bank employees in Nigeria stealing from customers’ account see the following:

Banker jailed 39 years for stealing N30m from dead customer-

http://punchng.com/court-jails-banker-39-years-stealing-n30m-dead-customer/

Banker arrested for withdrawing N50m from customers’ accounts- http://www.informationng.com/2013/12/police-arrest-banker-for-stealing-n50m.html

Banker accused of stealing customers’ N8.4m-

http://www.vanguardngr.com/2017/05/banker-accussed-stealing-customers-n8-4m/

Rogue bankers steal customers’ funds online-

http://www.businesstodayng.com/rogue-bankers-steal-customers-funds-online/

In view of the foregoing, it might not to be out of place to make a freedom of information request to the Nigeria Police and other relevant authorities for information on the number of bank employees standing trial and those convicted for theft of customers' funds or hacking into customers' accounts. This would enable one to have a better idea of the scale of such thefts or hacking of customers' accounts by bank employees in Nigeria.

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. 

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