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 ClockwiseReports 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.
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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 a contempt of the order of the Court.