Introduction:
In this era of mobile banking transfers, any slight error in bank account number may mean wrongfully sending money into the account details of another person other than the person intended to be paid. This is the sad reality of many bank customers who conduct financial transactions on a daily basis.
There have been instances where money have been mistakenly paid into a wrong account number and it becomes difficult to retrieve the said amount of money and customers will flood the banking hall to cause troubles because of mistakes of customer and not that of the banks.
Most times, it is not the problem of banks that causes customers to mistakenly pay money into wrong account as banks will always caution customers to confirm the bank account details of the recipient of their funds before making payment, but due to inadvertence or negligence from customers, these wrongful money transfers do occur and quite often.
In this article, we try to discuss the relationship between banks and its customers and also how to help customers to retrieve money mistakenly paid into a wrong bank account when such mistakes happen.
The nature of relationship between a bank and its customer:
Before we delve into the discussion of money being paid into a wrong account, we need to first determine the nature of relationship that exists between a bank and her customers. Thus, in the case of Trade Bank Plc v. Barilux (Nig.) Ltd. (2000) 13 NWLR (Pt. 685) 483 at 485, the court held that:
“The relationship between a banker and the customer is that of a debtor and a creditor. The customer is the one who has an account with the bank by paying money into it. The trade of a banker is to receive money and use it as if it were his own, he becoming debtor to the person who has lent or deposited with him the money to use as his own. One of the terms of the implied contract between a banker and the customer is that money lent to the bank is not payable except on demand by the customer who has paid it in.” See also the case of U.B.A Ltd. v. O. Abimbolu & Co. (1995) 9 NWLR (Pt. 419) 371 p. 491, paras. C-E.
Thus, the bank can only release money in its custody upon the request by the customer who deposited such money and, in the case, where a customer have wrongfully initiated a transaction authorizing a bank to pay money either by way of electronic transfer or over the counter vide a bank teller or cheque, the bank would not be held responsible for carrying out such transactions. See also section 61 of the Banks and Other Financial Institutions Decree No. 25 of 1991, which states that “banking business” means the business of receiving deposits on current account, savings account or other similar accounts, paying or collecting cheques drawn by or paid in by customers. Thus, in this form of business, the bank does not on its own issue out money to another customer without authorization by depositor of the money.
Who owns money paid into a bank?
Any money paid into a bank belongs to the bank from the moment of such payment, thus, creating as between the bank and the customer a debtor/customer relationship. Indeed, what the bank pays out is its own money. Thus, when money is paid by a customer into the bank, there is a contract between the bank and the customer in which the bank receives the money as a loan from the customer against the promise by the bank to honour the customer’s cheque or other orders of the customer whenever the need arises. See the cases of R. v. Okon (1933-1966) 1 NIILR 241, and Ekwunife v. Wayne (W.A) Ltd. (1989) 5 NWLR (Pt. 122) 422.
The right of a customer over money paid into his account with the bank:
The customer’s monies in the hands of the bank are not in the custody or under the control of the customer. Such monies remain the property in the custody and control of the bank, 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 bank and not the customer that bears the loss. Where the customer makes a demand, e.g. by issuing a cheque and the bank refuses to pay, the customer’s cause of action is in damages under their contractual relationship.
In the instant case in discuss, when the customer mistakenly transfers money into a wrong bank account, it could not be said that it was the bank that made the mistake on the customer’s account by transferring same into another person’s bank account. This is because, the bank cannot not initiate a transaction on its own volition without receiving a mandate from the customer. Thus, the right of a customer over money mistakenly paid into a wrong account in this circumstance extinguishes and can only be remedied by the courts. See the case of Afribank Nig. Plc v. A.I. Investment Ltd. (2002) 7 NWLR (Pt. 765) 40.
Ways to prove payment of money into a wrong bank account:
Where a customer has mistakenly paid money into a wrong account number, it can be established either by providing the bank teller or short message services (SMS) or email notification received from the bank debiting the customer’s account in the sum standing to his credit as well as oral evidence of the person who actually paid the money or by producing a receipt from the bank showing on the face of it that it received the payments. See the case of Aeroflot v. U.B.A. Ltd. (1986) 3 NWLR (Pt. 27) pg. 188 at 190.
Where there is an issue before the court as to whether or not, the stamp and initials on a bank’s payment counterfoil constitute evidence of receipts of the sum of money paid into a bank account, the account holder has the onus to prove by credible evidence that he made the alleged payments into the bank and that the payments were acknowledged by the hank. And where there is any short fall arising front the difference between the counterfoil and the amount actually received by the bank, the onus is on the bank to prove what it actually received. See also the case of U.B.A. Plc. v. Daniel Holdings Ltd. [2000] 6 NWLR (Pt. 659) 48 at 51.
How to retrieve money maid into a wrong bank account:
Where the customer has noticed that the money he paid was mistakenly transferred into a wrong account, these are some of the ways to retrieve the wrong payment:
a). The customer is required to immediately report the wrong payment to his bank through the customer-care helpline. Under this circumstance, the bank will be in the best position to handle such cases in order to protect its customer from losing his money to an unknown third party.
b). Where the bank cannot help to retrieve the customer’s money mistakenly paid into a wrong account, it is the duty of the customer to meet with a legal practitioner to help him in filing an application before a competent court of law against the customer’s bank and the third party in whose name and bank account the money was mistakenly paid into his bank account.
c). Upon filing an application before the court, it will be the duty of the court to weigh the evidence provided by the customer before the court in order to grant an order for the stated sum of money mistakenly transferred into a wrong account to be paid back into the customer’s account. Where the court gives an order for such money to be paid back to the customer, it is the duty of the legal practitioner who represented the customer to apply to the court that gave the order and obtain a certified true copy of such court order and serve it on the bank which will in turn carry out the directives contained in the said court order.
Conclusion:
It is a trite principle of law that money paid into a bank, does not belong to the customer as debtor/creditor relationship have been created upon payment of the money into the bank by the customer. However, in as much as the money belongs to the bank upon payment by the customer, the bank cannot release the money to the customer unless the customer makes a request or issues a mandate for the release of the money. In circumstance where a customer has authorized the bank to transfer money, it is the duty of the bank to carry out such instructions, especially where there are no restrictions placed on the customer’s account, since the money stands in the credit of the customer. Thus, where the bank carries out a customer’s instruction for payment which was mistakenly paid into a wrong account as a result of the customer’s inadvertence or mistake or negligenc, the bank will not be held liable for such wrong transfers.
However, a timely complaint by the customer to the bank for such wrong transfers can save the situation in reversing the wrongly transferred money, but in the event that the bank may not be of help to the customer, the court of law will be the last resort in such cases. See the cases of C.B.N. v. Auto Import Export (2013) 2 NWLR (Pt. 1337) 80, Wema Bank Plc v. Osilaru (2008) 10 NWLR (Pt. 1094) 150, F.B.N. Ltd v. Osunsedo (1997) 11 NWLR (Pt. 527) 132 and Barbedos Ventures Ltd. v. F.B.N. Plc (2018) 4 NWLR (Pt. 1609) 241 at 249.
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