Court orders bank to refund N12.7m illegally deducted from customers’ domiciliary accounts

A Magistrate Court, Surulere, Lagos has ordered Polaris Bank to refund the illegal deductions made on domiciliary and Naira accounts of three businesswomen with the financial institution amounting to $30,769 (N12, 773,442.66k).

The affected are Mrs. Adebomi Orogun, Mrs. Kehinde Banjo and Mrs. Oluwatoyin Ode. They had filed an originating application before the court against the bank over unjustifiable freezing of their accounts and subsequent unlawful deductions on their accounts.

In the suit brought pursuant to Order 1 Rule 2 of the Magistrates’ Courts Civil Procedure Rules of Lagos State (2009), the applicants narrated how their Dollar, Euro and Naira accounts were frozen by the bank without a valid court order.

The applicant said the financial institution proceeded to make unauthorised deductions from their accounts without any justification, whatsoever, as there was no time they were accused of engaging in fraudulent activities.

In her affidavit in support of the application, the first applicant (Orogun), who maintained USD, Euro and Naira accounts with Polaris said the bank usually deducts the requisite commission after every transaction she made.

She said: “I regularly transact on my Euro account with the bank. I recently wanted to transfer money with my Euro account, only to discover that I no longer have access to make transactions.

“I also discovered that there was no available balance left in my USD account. I was confused and had to make an inquiry with the bank to know why I no longer have access to my Euro account and why my USD account was cleared out.

“However, I was informed that they had not been deducting the proper commission per transaction on my account, which they only commenced later and ultimately led to my USD account being cleared out.

“This action carried out by the bank was done entirely without recourse to me, who believed that all due commissions had been deducted and I had enough balance to plan my life with. On March 4, 2022, I was shocked to discover that all my accounts (USD, EURO, and Naira) with the respondent had been frozen and a post no debit order placed on them.”

Orogun stated that she was neither informed nor given a satisfactory reason for the cruel act by the respondent, adding: “I did not engage in any fraudulent activity nor have I been officially accused of same by the bank. Hence, the freezing and placing of a post no debit on my accounts were totally unnecessary.”

She submitted that the development greatly disrupted her business activities and also subjected her to financial cruelty with no hope as to when her accounts would be unfrozen.

The other applicants also deposed to affidavits containing similar facts. The bank failed to neither show up nor present any evidence to counter the claim of the applicants. After reviewing the facts of the case, Magistrate Oluwatoyin Otitoju held that the action of the bank was illegal and void.

“An order of this Honourable Court is hereby made declaring the ‘post no debit’ order placed on the 1st applicant’s USD, Euro, and Naira accounts and 2nd applicant’s USD and Naira accounts and 3rd applicant’s USD and Naira accounts by the respondent (Polaris Bank) as illegal.

“An order of this Honourable Court is hereby made declaring the unauthorised deductions from the 1st applicant’s USD account, 2nd applicant’s USD account and 3rd applicant’s USD account as illegal and void.

“An order of this Honourable Court is hereby made directing the respondent to revert the applicants’ accounts back to status quo as of January 17, 2022,” the magistrate ruled.