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The Federal High Court in Abuja has issued an interim order freezing accounts at FairMoney Microfinance Bank Ltd, PalmPay Limited, and Opay Digital Services Limited. This order directs these organizations to reverse a total of N139,630,000, which was erroneously credited to their customers due to a system glitch at TAJ Bank Ltd.
The court’s decision follows a motion ex parte filed by TAJ Bank and six of its customers on July 23, 2024, in case number FHC/ABJ/CS/1018/2024. The Nigerian Interbank Settlement System Plc is also named as a respondent.
TAJ Bank’s legal team argued that according to the Central Bank of Nigeria’s October 2017 Regulatory Framework for Banking Verification (BVN) Operations, any funds that enter accounts through suspicious activities should be promptly returned to their original source.
In his affidavit, Muhideen Olujinmi, Head of Investigation and Fraud Management at TAJ Bank, stated that a system glitch allowed unauthorized transactions from TAJ Bank accounts to be transferred into accounts held by FairMoney, PalmPay, and Opay. The glitch led to the illegal transfer of N139,630,000.
Olujinmi emphasized that the incident exposes TAJ Bank and its customers to significant financial risk. He urged the court to impose a freeze on the implicated accounts to prevent further dissipation of the funds.
The court granted TAJ Bank’s request for a freezing order on July 26, 2024. The order requires FairMoney, Opay, and PalmPay to disclose the amounts in the affected accounts within seven days. Additionally, TAJ Bank must provide a fresh undertaking to protect the respondents against any potential losses resulting from these interim orders.
The court has scheduled a hearing for August 12, 2024. FairMoney, Opay, and PalmPay did not have legal representation at the initial hearing. TAJ Bank’s lawyer, Rilwan Idris, confirmed that the respondents have been served with the court orders and that an affidavit ensuring protection against damage has been filed.
