Erroneous bank transfers, where money is mistakenly sent to the wrong account, are increasingly common in Nigeria due to the widespread use of mobile and online banking platforms.
Recovering such funds is not as simple as calling your bank. It involves a defined legal process that may require court intervention. Below is a detailed guide outlining the legal steps to recover mistakenly transferred funds in Nigeria.
Notify the Bank Immediately
The first and most important step is to contact your bank and the recipient’s bank immediately. Submit a formal complaint with the following details:
- Date and time of the transaction
- Amount involved
- Recipient’s account number (if known)
- Your account details
- Supporting evidence (e.g., screenshots, receipts, or bank statements)
Upon receiving your complaint, the bank may place a Post No Debit (PND) restriction on the recipient’s account to prevent withdrawal of the funds. However, the bank cannot reverse the transaction without the consent of the recipient or a court order.
Recipient’s Consent is Mandatory
Under Nigerian law, a bank does not have the legal right to unilaterally reverse a transaction without the recipient’s approval or a court directive.
This position was affirmed in Diamond Bank Ltd v. P.I.C. Ltd (2009) LPELR-8155 (CA), where the Court of Appeal ruled that debiting a customer’s account without consent or a valid court order is unlawful.
Try to Resolve Directly with the Recipient
If the recipient admits the error and agrees to return the money, they can provide written consent to their bank, authorizing a reversal.
However, if the recipient is uncooperative, unreachable, or refuses to refund the money, you must proceed with legal action. Time is critical, so consult a lawyer promptly.
Obtain a Court Order to Reverse the Funds
When the recipient is not reachable, the only way to retrieve the funds is through a court order.
Your lawyer will file an originating application (typically by motion on notice), supported by an affidavit setting out:
- The background and nature of the mistaken transfer
- Documentary proof of the error (e.g., transaction receipts, bank statements)
- Correspondence with the bank
- Known details of the recipient’s account
The court will evaluate the evidence and, if satisfied, issue an order directing the bank to reverse the transfer.
This position is supported in UBA Plc v. Jargaba (2007) 11 NWLR (Pt. 1045) 247, where the court emphasized that banks must operate within legal boundaries and cannot reverse transactions without judicial approval.
Key Elements You Must Prove
To obtain a recovery order, you must establish the following:
- Proof of debit:Your bank statement must show the transaction.
- Evidence of error:Demonstrate that the transfer was made by mistake and that no legitimate relationship or transaction existed.
- Recipient’s details:Provide accurate information about the recipient’s account.
- Bank complaint:Submit a copy of your written complaint and the bank’s response.
In First Bank of Nigeria Plc v. Excel Plastic Industry Ltd (2003) 13 NWLR (Pt. 837) 412, the court stressed that the burden of proof lies with the claimant to establish that the payment was made in error.
Ensure Proper Service of Court Processes
Proper service of court documents on both the bank and the recipient is crucial. If the recipient’s physical address is unknown, your lawyer may apply for substituted service (such as via email, newspaper publication, or at the bank branch).
Failure to effect proper service could lead to the dismissal of your case or the reversal of any judgment. This was made clear in Emeka v. Okoroafor (2017) LPELR-41737(SC), where the Supreme Court held that improper service renders proceedings defective and liable to be set aside.
Recovering funds from an erroneous bank transfer in Nigeria is a legal process involving:
- Prompt notification to the bank
- Seeking the recipient’s consent
- Filing a court application if necessary
- Providing key documentary evidence
- Ensuring proper service of legal documents
Due to the legal complexities involved, it is strongly advised to engage a lawyer experienced in banking and financial disputes to guide you through the process and improve your chances of recovery.