Banks And Abuse Of Court Orders

Banks And Abuse Of Court Orders

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By Daniel Bulusson, Esq

image image

The current practice victimizes the customer

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It has become the practice in our banking industry, where a
customer would be at home, office or anywhere of his/her choice,
and try to gain access to their account only to realize that their
bank account has been frozen or a lien has been placed on a certain
amount in the account, thereby refusing the customer access to the
money in the account, panicked by this latest development, the
customer visits the bank, only to be told by Customer Care that
there’s a court order authorizing them to do so. It is either the
customer goes and get his/her own court order or report to the
police station where an allegation of fraud has been reported.

Now the customer confused, maybe because he/she didn’t
participate in any fraudulent transaction leading to the freezing
of the account, instead of getting the services of a lawyer,
approaches another court of coordinate jurisdiction for a court
order to unfreeze the account.  To the surprise of the
customer, when such order is granted and the customer submits same
to the bank, the bank now informs the customer that their legal
team says both orders are from courts of coordinate jurisdiction,
as such they cannot unfreeze the account, the customer will then
have to wait till investigation is concluded before accessing funds
in the account.

From the scenario above, the banks through their lackadaisical
attitude of not checking the veracity or otherwise of a court order
before executing it, encourages abuse of court orders by parties
involved, subjecting customers to untold hardship without any
checks from the appropriate regulatory institution. Firstly, it is
not every court order that directs the freezing of an account, in
some instance, the police station where an incidence of fraud has
been reported, writes to a nearby Magistrate court requesting
permission for the bank to supply them the information of a
particular customer, the court then grants an order to that
respect, the bank on getting such order rushes to freeze the
customer’s account. Secondly, some of the court orders are obtained
without a file or suit number at the court of first instance, yet
the bank on receipt of such orders instead of investigating the
veracity of such court order goes ahead to freeze a customer’s
account.

Thirdly, the Federal High Court presided over by Hon. Justice
Inyang Ekwo in suit no FHC/ABJ/CS/1635/2019 ruled that magistrates
are divested with the power under the law to freeze bank accounts.
In its ruling, the court held that, ‘a magistrate lacks the powers
to make bankers orders and/or order freezing or enabling a post no
debit on bank accounts pursuant to non-existent/repealed section 7
of the Banker’s Order Act 1847’.

To my mind, it is the duty of banks to protect the funds of
customer domiciled with them, it is also the duty of the bank that
before certain actions are taken on the account of a customer, the
customer ought to be notified of any change thereof to his/her
standing in the bank. In achieving this duty, the legal team of
these banks are expected to conduct due diligence on any court
order served on the bank before enforcing same. The court in which
the order was sought and obtained ought to be investigated, the
customer need be put on notice, and the prayers granted on the face
of the Order need to be followed stricto senso, as it does not make
sense to suffer a customer who decides to bank funds and then has
to go through a whole lot of difficulty in accessing such
funds.

In sum, there ought to be due process of initiating a process
when an allegation of fraud has been reported, every motion
ex-parte should be supported by a motion on notice to afford the
respondent fair hearing, and to be aware of any change to his
standing before the freezing of account, and such order must be
gotten from a court of competent jurisdiction.

Daniel Bulusson is a legal professional practicing
in Minna.

By Daniel Bulusson, Esq

image image

The current practice victimizes the customer

image

It has become the practice in our banking industry, where a
customer would be at home, office or anywhere of his/her choice,
and try to gain access to their account only to realize that their
bank account has been frozen or a lien has been placed on a certain
amount in the account, thereby refusing the customer access to the
money in the account, panicked by this latest development, the
customer visits the bank, only to be told by Customer Care that
there’s a court order authorizing them to do so. It is either the
customer goes and get his/her own court order or report to the
police station where an allegation of fraud has been reported.

Now the customer confused, maybe because he/she didn’t
participate in any fraudulent transaction leading to the freezing
of the account, instead of getting the services of a lawyer,
approaches another court of coordinate jurisdiction for a court
order to unfreeze the account.  To the surprise of the
customer, when such order is granted and the customer submits same
to the bank, the bank now informs the customer that their legal
team says both orders are from courts of coordinate jurisdiction,
as such they cannot unfreeze the account, the customer will then
have to wait till investigation is concluded before accessing funds
in the account.

From the scenario above, the banks through their lackadaisical
attitude of not checking the veracity or otherwise of a court order
before executing it, encourages abuse of court orders by parties
involved, subjecting customers to untold hardship without any
checks from the appropriate regulatory institution. Firstly, it is
not every court order that directs the freezing of an account, in
some instance, the police station where an incidence of fraud has
been reported, writes to a nearby Magistrate court requesting
permission for the bank to supply them the information of a
particular customer, the court then grants an order to that
respect, the bank on getting such order rushes to freeze the
customer’s account. Secondly, some of the court orders are obtained
without a file or suit number at the court of first instance, yet
the bank on receipt of such orders instead of investigating the
veracity of such court order goes ahead to freeze a customer’s
account.

Thirdly, the Federal High Court presided over by Hon. Justice
Inyang Ekwo in suit no FHC/ABJ/CS/1635/2019 ruled that magistrates
are divested with the power under the law to freeze bank accounts.
In its ruling, the court held that, ‘a magistrate lacks the powers
to make bankers orders and/or order freezing or enabling a post no
debit on bank accounts pursuant to non-existent/repealed section 7
of the Banker’s Order Act 1847’.

To my mind, it is the duty of banks to protect the funds of
customer domiciled with them, it is also the duty of the bank that
before certain actions are taken on the account of a customer, the
customer ought to be notified of any change thereof to his/her
standing in the bank. In achieving this duty, the legal team of
these banks are expected to conduct due diligence on any court
order served on the bank before enforcing same. The court in which
the order was sought and obtained ought to be investigated, the
customer need be put on notice, and the prayers granted on the face
of the Order need to be followed stricto senso, as it does not make
sense to suffer a customer who decides to bank funds and then has
to go through a whole lot of difficulty in accessing such
funds.

In sum, there ought to be due process of initiating a process
when an allegation of fraud has been reported, every motion
ex-parte should be supported by a motion on notice to afford the
respondent fair hearing, and to be aware of any change to his
standing before the freezing of account, and such order must be
gotten from a court of competent jurisdiction.

Daniel Bulusson is a legal professional practicing
in Minna.

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