By Daniel Bulusson, Esq

“The current practice victimizes the customer”

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.