Erroneous Bank Transfers In Nigeria: The Costly Mistakes, Fraud Risks, And Legal Remedies

By Ujah Israel Ujah Esq., B/Phil, LLB, LLM, (Ph.D. in v)

In today’s fast-paced digital economy, money transfers have become almost second nature. But with the rise in mobile and online transactions comes a parallel surge in financial errors—some genuinely mistaken, others suspiciously fraudulent. One extra zero. A wrong digit in the account number. A glitch in the banking system. These seemingly minor errors can cost individuals and businesses millions.

While banks have mechanisms for handling technical faults or system glitches (in which case reversals may occur automatically), the reality is that most erroneous transfers do not enjoy that kind of internal redress. Instead, if the transfer was made in error—whether by mistake, fraud, or into the wrong account—the responsibility to retrieve those funds falls squarely on the sender. The key legal instrument for this? A court order.

When a Transfer Goes Wrong: Understanding the Categories

1. Technical/System Glitches:

Sometimes, due to server downtime or synchronization issues, a duplicate or unintended transfer may occur. Banks typically detect such anomalies and may reverse them without prompting. But this is rare and usually requires internal audits.

2. Human Error:

Adding an extra zero—say, ₦1,000,000 instead of ₦100,000—is more common than we care to admit. Mistakes like this, unless reversed by the recipient in good faith, require legal action.

3. Fraudulent Transfers:

If your account is hacked or manipulated to send money to a third party, you’ll need to initiate a criminal complaint and also pursue civil remedies.

4. Wrong Beneficiary Account:

If you send money to the wrong account number, intentionally or not, the only safe path to recovery is a court order. Banks cannot unilaterally reverse such transfers without the recipient’s consent or a valid order of court.

The Legal Process: How to Get a Court Order

To retrieve your money, you need to file either:

• A Motion Ex Parte (if there is urgency or fear that the money will be moved quickly), or

• A Motion on Notice (if due process and the rights of the other party need to be respected in open court).

In both cases, you must present:

• Proof of the erroneous transfer (bank statements, SMS/email alerts),

• An affidavit explaining the circumstances,

• Legal argument showing that retaining the money amounts to unjust enrichment or fraud.

Once granted, the court order directs the bank to trace the recipient account, freeze it, and potentially reverse the transfer.

The Cost of Recovery: A Hard Truth

The legal fees involved in getting a court order can be burdensome. Depending on the amount in question, some courts may impose filing or judgment fees amounting to up to 10% of the disputed sum. Imagine you’re trying to retrieve ₦100 million. You may end up paying ₦10 million in court-mandated deductions—excluding professional legal fees.

This is not just punitive—it’s cautionary. The legal system is overburdened with such cases, and the Chief Judges in some jurisdictions are now reportedly issuing directives restricting the routine granting of such court orders. The embarrassment to banks and financial institutions that are caught in the web of fraudulent or careless transactions is palpable. As such, courts are becoming increasingly wary and cautious.

Are You Caught in This Mess?

If you’re currently dealing with an erroneous transfer, your first steps matter:

i. Act fast.

ii. Document everything.

iii. Consult a lawyer immediately.

Do not assume that the bank will resolve it for you. They won’t, unless you bring the weight of the law. And even at that, the cost, delay, and stress may leave you regretting the initial mistake.

A Word of Advice: Prevention is Still the Best Remedy

i. Always double-check transfer details.

ii. Avoid making large transfers under pressure or in distraction.

iii. Use bank features like “Beneficiary Name Verification” to confirm details.

In the end, your financial vigilance is your first defence. The legal system is only a remedy—a costly, time-consuming one at that.

Ujah Israel Ujah Esq., B/Phil, LLB, LLM, (Ph.D. in v)

Legal Practitioner, Public Interest Advocate, and Writer

Abuja, Nigeria.

He can be reached via 07034651322

Source: BarristerNG