Abdulrahman Musa, on March 12, 2024, walked into a bank in Kaduna metropolis looking confused and agitated. He had just mistakenly transferred N200,000 to the wrong account number.

He immediately rushed to the customer service unit to lodge a complaint about the erroneous transfer, which had gone to an account in another bank.

Narrating how it happened, he explained that the account details were sent to him the previous day, and he went ahead to make the transfer. However, 24 hours later, the supposed recipient could not confirm the receipt of the funds.

Upon rechecking the account name, Abdulrahman discovered that he had wrongly transferred the funds to a completely different account.

He confirmed that after about a month of following up, “The bank was able to initiate a reversal request and eventually reversed the money back to my account.”

However, the outcome was not the same for Sarah Anzaku, who said she could not recover her money after making a similar mistake.

Speaking to Daily Trust, she said: “I made a wrong transfer to another account while trying to send money to my brother. The account was a wallet, and since the accounts are linked to phone numbers, I didn’t bother to check the name. After transferring, I later realized it was the wrong account.

“I went to complain at my bank, but they categorically told me they couldn’t do much because it was a financial technology company. That was how I lost N20,000, and I had to look for money again to resend to my brother.”

Sharing a similar experience, Uche Kelechi said that after transferring funds to a wrong PalmPay account, he could not recover his money.

“It was during the Easter period. I wanted to do a waybill to the East, and upon reaching the park, they gave me an account. After I transferred, the man said he didn’t see the alert and that the account number I paid into wasn’t his. He also said the name showing on the transfer was not his.

“Because I needed the goods to move, I had to withdraw cash from a POS operator and give them at the park.

“I complained to the bank, but nothing came out of it, and it was frustrating because that was my hard-earned money,” he said.

Since the advent of banking technology, Nigeria has witnessed a tremendous increase in the volume of banking transactions through mobile bank applications.

Reports say the value of financial transactions through mobile devices almost doubled in 2024, according to the Nigeria Interbank Settlement System (NIBSS).

According to the NIBSS data, the value of mobile money transfers rose by 74 percent to N41.5 trillion in 2024 from N23.8 trillion in the same period of last year.

Similarly, data from the Nigerian Communications Commission shows the country had 219 million mobile connections at the end of March 2024.

Also, the 2021 Global Findex report by the World Bank revealed that higher adoption of mobile money drives the growth of account ownership in financial institutions, particularly in Sub-Saharan Africa (SSA) countries like Nigeria.

The report showed that the country’s banked population increased by 15.6 percentage points to 45.3 percent in 2021, the highest in 10 years from 29.7 percent in 2011.

“Mobile money has become an important enabler of financial inclusion in Sub-Saharan Africa, especially for women, as a driver of account ownership and of account usage through mobile payments, saving and borrowing,” it said.

In addition to growth in the mobile money segment, NIBSS data revealed that total cashless transactions surged by 84.37 percent to N572.63 trillion in the first seven months of 2024.

However, amidst this significant progress, there still lie human errors in mobile banking transactions, one of which is erroneous transfer to wrong account details by bank customers.

Daily Trust highlights a step-by-step procedure to be followed to reverse funds erroneously sent to another account number.

Formal report to the recipients’ bank

Once a customer erroneously transfers funds to another account, the first step to take is for the customer to report the erroneous transfer to the bank of the recipient of the funds.

The standard procedure is to write a formal complaint, noting all relevant facts as they relate to the transaction. It is usually advisable to attach any proof of the transaction to the letter.

Checks by Daily Trust show that usually, upon receipt of such an application, the standard practice is for the recipient’s bank to place a Post No Debit (“PND”) on the account that received the funds to restrict its owner from withdrawing below the amount erroneously transferred to his account while the complaint is being investigated.

Further checks show that if the recipient gets a hint of the Post No Debit (PND) placed on his account and consents to the reversal of the funds, the bank can return the transferred funds to the victim without the need for an order of the court. Where, however, the victim does not expressly consent to the reversal, only a Court order can be deployed to compel the bank to reverse the erroneously transferred funds.

However, the recipient’s bank cannot unilaterally release the contact information of the recipient (such as phone number, email, or contact address) as such will constitute a breach of his right to privacy. The bank may contact the recipient to confirm if the complaint made against his account is true.

Getting court order for reversal

Subsequently, a scenario could also play out where the sender is required to engage the services of a qualified legal practitioner to file an application in Court seeking the Court’s order directing the reversal.

Such an application is usually supported by an affidavit detailing all the facts related to the said transaction and attaching all relevant documents (such as receipts and/or bank statements) to substantiate the facts contained in the affidavit.

The court will subsequently review the said application and make the appropriate order.

Consequently, the appropriate form to seek a reversal order depends on the funds involved and location of the transaction.

Where the location of the transaction is Lagos State and the funds involved are less than N10,000,000 (Ten Million Naira Only), it is advisable to file the reversal application at the Magistrate Court. Where the location of the transaction is in Abuja and the funds involved do not exceed N5,000,000 (Five Million Naira Only), the recommended Court to file an application seeking reversal of the funds will be the District Court.

Where, however, the funds involved exceed N10,000,000 (Ten Million Naira Only) and N5,000,000 (Five Million Naira Only) in Lagos and Abuja, respectively, the applicant must file the said application at the High Court of either state. It is important to understand that whether or not the funds exceed N10,000,000 (Ten Million Naira Only), and N5,000,000 (Five Million Naira Only) in Lagos or Abuja respectively, the applicant can proceed to file the application at the State High Court.

The Magistrate/District Court is only recommended in cases of lesser funds as highlighted above, because of the convenience it offers and the likelihood that the application will be heard and granted expeditiously.

More importantly is that proper service of the application seeking reversal on the bank and the recipient of the erroneously transferred funds is fundamental to the success of the case of the applicant. If service is not properly effected, the action may be struck out, or any order made at the instance of the applicant may be set aside on appeal. When the recipient’s address is unknown, an order of substituted service may be necessary. The recipient may be served through his bank.

How applicants can prove eligibility for a reversal order

Subsequently, applicants seeking an order of the court for the reversal of the funds erroneously transferred must demonstrate proof of the debit of the alleged sum. This is typically done by exhibiting the applicant’s bank statement on the affidavit in support of the application.

Also, the sender must show evidence that the payment was made in error, demonstrating that the payer had no legitimate business dealings with the recipient regarding the payment.

Similarly, there must be disclosure of the recipient’s particulars and bank account details, including names, bank, account number, and branch (if applicable), often provided through bank statements or debit notifications.

Also, there must be documentation of the complaint to the bank and the service of a demand notice, illustrating attempts to resolve the issue before litigation.

When the Court order is successfully obtained, the victim of the erroneously transferred funds is obligated to serve the recipient’s bank with the said order. The bank, at this point, is mandated to ensure the immediate reversal of the funds. Failure by the bank to effect the reversal at this point is deemed as contempt of order of the Court. (Daily Trust)

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