ERRONEOUS TRANSFER OF FUND AND IT'S REVERSAL: STEPS TO TAKE IN NIGERIA

Erroneous bank transfers, where money is mistakenly sent to the wrong recipient, are becoming more common in Nigeria with the widespread use of mobile and online banking. Recovering such funds is a legal process that often requires more than just contacting your bank. Below is a detailed guide on the legal procedures for recovering funds from mistaken transfers in Nigeria. 1. Notify the Bank Immediately The first step is to notify the recipient’s bank about the mistaken transfer. This can be done by submitting a formal complaint with all relevant transaction details, such as: Date and time of the transaction Amount involved The recipient's account details (if known) Your account details Supporting documents like transaction receipts or screenshots Once the complaint is lodged, the bank may place a Post No Debit (PND) on the recipient’s account to prevent withdrawals of the erroneous amount while the complaint is under investigation. However, the bank cannot refund the money without the recipient's consent or a court order. Consent Requirement The bank has no legal authority to reverse the funds unless the recipient consents or a court issues an order for reversal. This principle is reaffirmed in Diamond Bank Ltd v P.I.C. Ltd (2009) LPELR-8155(CA), where the court confirmed that debiting an account without the customer's consent or a court order is unlawful. 2. Attempt Direct Resolution with the Recipient If the recipient acknowledges the mistake and is cooperative, they can consent to a reversal through their bank. The bank can then initiate the process and refund the money. However, if the recipient is uncooperative or unreachable, further legal steps must be taken. Please note that time is of the essence here, so contact your lawyers immediately. 3. Obtain a Court Order for Reversal If the recipient refuses to return the funds, you will need to obtain a court order compelling the bank to reverse the transfer. This is where legal representation becomes necessary. Your lawyer will file an originating application (usually by way of motion on notice) supported by an affidavit containing all the relevant facts of the transaction, such as: The circumstances surrounding the transfer Proof that the payment was made in error Bank statements or other evidence showing the transfer A copy of your complaint to the bank The recipient's account details (if known) The court will review the facts and determine whether to issue an order directing the bank to reverse the erroneous transfer. In UBA Plc v Jargaba (2007) 11 NWLR (Pt. 1045) 247, the court held that banks are bound by law to respect customer transactions, and cannot reverse funds without judicial authorization. 4. Determine the Appropriate Court Based on Jurisdiction The choice of court depends on two main factors: The amount involved in the transaction The location of the bank or where the transaction occurred For smaller sums (below ₦10 million in Lagos or ₦5 million in Abuja), the Magistrates' Court has jurisdiction. For larger sums, you will need to approach the High Court. Practical Example: Lagos: For amounts less than ₦10 million, file at the Magistrates’ Court. For amounts above ₦10 million, file at the High Court of Lagos State. Abuja: For sums under ₦5 million, file at the Magistrates' Court. For larger amounts, go to the High Court of the Federal Capital Territory. 5. Establish Key Proofs for Recovery For the court to grant the order of reversal, you must establish the following key elements: Proof of debit: Bank statements showing the erroneous transfer. Evidence of mistake: Documentation proving that the transfer was made in error, and that no legitimate transaction existed between the payer and the recipient. Recipient details: Provide the recipient's account information and bank details, often found through the transaction receipt or statements. Complaint to the bank: A copy of your complaint and any response from the bank regarding the issue. In First Bank of Nigeria Plc v Excel Plastic Industry Ltd (2003) 13 NWLR (Pt. 837) 412, the court emphasized that the burden of proof lies with the claimant to show that a payment was made in error before the court can issue a recovery order. 6. Ensure Proper Service of Court Documents Proper service of the court documents on the bank and the recipient of the mistaken payment is critical to the success of the case. If the recipient’s address is unknown, your lawyer can request an order for substituted service. In Emeka v Okoroafor (2017) LPELR-41737(SC), the Supreme Court held that improper service could lead to the striking out of the case, or any judgment obtained could be set aside on appeal. Avoid Involving the Police It may be tempting to involve the police in cases of erroneous bank transfers, especially when fraud is suspected. However, the police have no legal authority to instruct a bank to reverse a transfer. Such matters fall strictly within the civil jurisdiction of the courts. In Nigerian Police Force v. Ogheneovo (2010) 1 NWLR (Pt. 1185) 403, the court ruled that police involvement in civil recovery matters is inappropriate, as they lack jurisdiction to interfere in the reversal of bank transfers. Conclusion: Legal Expertise is Essential Recovering an erroneous transfer in Nigeria requires following the correct legal procedures, from notifying the bank to obtaining a court order. The assistance of a legal professional is crucial to navigating these steps successfully. Proper documentation, court filings, and adherence to legal protocols are key to ensuring the recovery of your funds.