N33 billion fraud rocks Interswitch

Interswitch Limited, one of the Nigeria payment platforms, is currently engulfed in a whooping N33 billion fraud.

Interswitch Limited, in a bid to recover the huge loss, has instituted a suit against Access Bank Plc and 53 others before a Federal High Court, Lagos.

Named as defendants alongside Access Bank Plc in the suit marked FHC/L/CS/2140/2023, are: Baines Credit Microfinance Bank Ltd; Bank Of Industry; Bluridge Microfinance Bank Limited; Branch International Financial Services; Credit Direct Limited; Ecobank Plc; Eartholeum Networks Limited; Fairmoney Microfinance Bank; Fewchore Finance Company Ltd; Fidelity Bank Plc; First City Monument Bank Plc; First Bank Of Nigeria Limited; Globus Bank Plc; Guaranty Trust Bank Plc; Hasal Microfinance Bank Ltd; Heritage Bank Plc; Infinity Trust Mortgage Limited; Izon Microfinance Bank Ltd and Jaiz Bank Plc.

Others include; Keystone Bank Plc; Kuda Microfinance Bank Ltd; La Fayfttee Microfinance Bank Ltd; Lapo Microfinance Bank Ltd; Links Microfinance Bank Ltd; Lotus Bank Plc; MIM Finance Company Ltd; New Edge Finance Limited, 29, Nigerian Navy Microfinance Bank Limited; Nirsal Microfinance Bank Limited; Opay Digital Services Limited 32. Pagatech Limited; Palm Pay Limited; Paralex Bank Plc; Polaris Bank Plc; Providus Bank Plc; Renmoney Microfinance Bank Limited; Rolez Microfinance Bank Limited; Smartcash Payment Services Bank Limited; Sparkle Microfinance Bank Limited; Stanbic Ibtc Bank Plc; Standard Chartered Bank Plc and Sterling Bank Plc.

Also listed as defendants in the suit are: Suntrust Bank Plc; Taj Bank Limited; Tangerine Money Microfinance Bank Ltd; Touchgold Microfinance Bank Ltd; Union Bank Of Nigeria Plc; United Bank Of Africa Plc; Unity Bank PIc; Vale Finance Limited; VFD Microfinance Bank Limited; Wema Bank Plc and Zenith Bank Plc.

Interswitch’s suit filed by its lawyer, Emmanuel Okorie, said it’s motion on notice is pursuant to Order 3 Rules 1, 6 and 9 of the Federal High Court, (Civil Procedure) Rules 2019, and under the court’s inherent jurisdiction.

The payment platform, Interswitch in a bid to recover the money is asking the court to determine the followings: “whether having regards to the Central Bank Guidelines Nos BPS/DIR/GEN/CIR/02 004 of 2015, BPS/ DIR/GEN/CIR/05/011 of 2018, any sum/monies to the extent of the sums Illegally received (following the system glitch of the Plaintiff’s server) of the respective Customer bank’s accounts of the 1,7, 8, 11-15, 20, 21, 34, 35, 41, 43, 48,49, 50, 53 and 54 defendants’ Customers Account Holder (1st level beneficiaries) listed in the document marked exhibits A1 -A20 attached herewith and domiciled with the stated defendants should not be blocked and or placed a No Debt restrictions by the aforementioned Defendants

“Whether having regard to the Central Bank guidelines Nos BPS/DIR/GEN/CIR/02.004 of 2015; BEY DIR/GEN/CIR/US/011 of 2018, a sum/monies to the extent of the sum is illegally received following the system glitch in the Plaintiff’s server) into the respective Bank accounts of the 1, 7, 8, 9, 11-15, 20, 21, 34, 35, 41, 43, 48, 49, 53 and 54 defendants’ Customers Account Holders (1st level beneficiaries) as listed in the document marked EXHIBITS A1- A30 attached herewith and domiciled with the aforementioned Defendants should aut be retumed to the Plaintiff?

“Whether having regard io the Central Bank Guidelines Nos. BPS/DIR/GEN/CIR/02.004 of 2015; BEY DIR/GEN/CIR/US/011 of 2018, any sum monies to the extent of the sums illegally received (following the system glitch in the Plaintiff’s server) into the respective customers bank accounts of the 1, 9, 12-14, 48 and 48 defendants customers’ account Holder (2nd level beneficiaries) as listed in the document marked EXHIBITS C attached herewith and domiciled with the aforementioned Defendants Respondents should not be blocked and or placed a ‘No Debit restrictions by the aforementioned defendants.

“Whether having regard with the Central Bank guidelines Nos. Bry/DIR/GEN/CIR/2 004 of 2015; BPS/DIR GEN/CIR/05/011 of 2018, any sum monies to the extent of the sums Illegally received (following the system glitch in the Plaintiff’s server) into the respective Bank accounts of the 1, 9, 12-15, 48 and 54 Defendants Customers Account Holders (2nd level beneficiaries) as listed in the document marked Exhibits C attached herewith and domiciled with the aforementioned Defendants should not be returned to the Plaintiff.

“Whether having regard to the Central Bank of Nigeria’s Regulatory Framework for Banking Verification (BVN) Operations and Watchlist for the Nigerian Banking Industry October 2017 the 1-40 defendants should not be mandated to block, freeze place a lien and or placing Post No Debit restriction on the 1- 54 Defendants Customers Account holders as listed in the document marked EXHIBIT B! – BY attached herewith and domiciled with the aforementioned defendants, until the illegal sums monies received from the respective Customer Account Holders as listed in the document marked EXHIBITS A’ A™ attached herewith are fully retumed

“Whether having regard to the Central Bank of Nigeria’s Regulatory Framework for Banking Verification (BVN) Operations and Watchlist for the Nigerian Banking industry October 2017 the sums monies to the extent of which illegally entered into the accounts ash ted in Exhibits A A™(1st level beneficiaries found in all the accounts Linked to the Bank Verification Numbers of the 1- 54 Defendants Customers/Account Holders as listed in the document marked EXHIBITS B’ – B™ attached herewith and domiciled with the 1- 54 defendants should not be immediately returned to the plaintiff hereof

The Plaintiff said if the above is determined in its favour, seeks the following reliefs: “a declaration that by the Provisions of the Central Bank of Nigeria Act 2007 and Central Bank guidelines now BPS/DIR/GEN/CIR/02.004 of 2015; BEY DIR/GEN/CIR/US/011 of 2018, the 1st–54th Defendant as Deposit Money Banks Switches and Payment Service Providers in the Nigerian Banking Financial and Payment industry, have a duty and obligation to protest the banking and payment industry from abuse by dishonest user and to take reasonable steps to forestall any damages of the banking and payment system whenever any abuse fraud is within its knowledge or has been brought to its attention

“An order of Mandatory Injunction directing the 1, 7, 8, 9, 11-15, 20, 21 34 35, 41, 43, 48, 49, 53 and 54 defendants to comply with the Central Bank guidelines Nos. BPS/DIR/GEN/CIR/12/004 of 2015, BPS/DIR/GEN CIR/08/011 of 2018 and the Central Bank of Nigeria’s Regulatory Framework for Banking Verification (BVN) Operation and Watchlist for the Nigerian Banking Industry October 2017 by blocking or placing ‘No Debit restriction on the sum monies to the extent of the sums illegally received (following the system glitch in the Plaintiff’s server) into the respective bank accounts of the aforementioned Defendants’ Customers Account Holders (1st level beneficiaries), domiciled with the aforementioned defendants, pending the complete full refund, reversal of the entire sum Unlawfully and illegally transferred to the said accounts.

“An order of Mandatory Injunction directing the 1st to 54 defendants to comply with the Central Bank guidelines numbers; BPS/DIR/GEN/CIR/02.004 of 2015; BEY DIR/GEN/CIR/US/011 of 2018 and the Central Bank of Nigeria’s Regulatory Framework for Banking Verification (BVN) Operations and Watchlist for the Nigerian Banking industry, October 2017 by blushing freezing, placing a lien and or placing Post No Debit restriction on the 1 to 54 defendants Customers Account holders, domiciled with the aforementioned Defendants Respondents, pending the complete/full refund reversal of the entire sum unlawful y and illegally transferred to the account numbers listed in the document marked EXHIBITS A1 – A20.

“An order of Mandatory injunction directing the 1, 9, 12-14, 41 and

48″ defendants to comply with the Central Bank guidelines Nos. BPS/DIR/GEN/CIR/02/004 of 2015, BPS/DIR/CIR/05/011 of 2018 and the Central Bank of Nigeria’s Regulators Framework for Banking Verification (BVN) Operations and Watchlist far the Nigerian Banking industry October 2017 by blocking of placing No Debit restriction on the sum montes to the extent of the sums illegally received (following the system glitch in the Plaintiff’s server) into the respective Bank accounts of the aforementioned Defendants Customer/Account Holders (2nd level beneficiaries) as listed in the document marked F Exhibits C attached herewith and domiciled with the aforementioned Defendants pending the complete full returned) rev ena of the entire sum Unlawfully and illegally transferred to the said accounts

“An order of Mandatory Injunction directing the 1, 7, 8, 11-15, 20, 21, 34, 35, 41, 43, 48, 49, 50, 53 and 58 Defendants/Respondents to Freeze Place a lien and Post No Debit on any and all accounts belonging to and in the name of the 8 Defendant hereof Eartholeum Networks Limited to the extent of the sum illegally received (following the system glitch in the Plaintiff’s sever) into the said accounts of the 8 defendant (Eartholeum Networks Limited), domiciled with the aforementioned defendants pending the returned/reversal of the entire sum Unlawfully and illegally transferred to the said accounts

“An order against the 1,7 8, 11-15, 20, 21, 41, 43, 48 49, 50, 53 and 54 Defendants (1st level beneficiaries) to reverse and pay to the Plaintiff all sums wrongfully, illegally and illicitly debited from the Plaintiff Settlement/ Collection Account and Illegally transferred into the aforementioned Defendants’ various customers bank accounts to the sum, domiciled with the aforementioned Defendant

“An order against of the 1st to 54th defendants, to reverse, refund and to pay to the Plaintiff all sum illegally and illicitly debited from the Plaintiff settlement/collection account as listed in EXHIBITS A1- A20 (11” level beneficiaries) standing in credit in all the accounts linked to the Bank Verification Numbers (BVN} 54th Defendant its Customers Account Holders, domiciled with 1st to 54th defendants.

Interswitch Limited, in an affidavit in support of the motion on notice, deposed to by its divisional Head, Engineering Department, Abdul Hafiz Ibrahim, states among others: “That following system glitch in the Plaintiff’s system, some service merchants agents of the plaintiff carrying on business as digital financial services agents with accounts domiciled with the 1, 7, 8, 11-15, 20, 21, 34, 35, 41, 43, 45, 49, 50, 53 and 54 defendants, took advantage of the said glitch and unlawfully initiated multiple refunds for successful card transaction. The said multiple refunds were erroneously settle into these respective bank accounts domiciled with the 1, 7, 8, 11-15, 20, 21, 34, 35, 41, 43, 45, 49, 50, 53 and 54 defendants.

“That the plaintiffs agents upon unlawfully received credits in excess of the successful card transactions in their accounts domiciled with the 1,7, 8, 11-15, 20, 21, 34 38, 41, 43, 45, 49, 50, 53 and 54, defendants proceeded to dissipate the monies by unlawfully transferring the monies to other customers, accounts (2nd level beneficiaries) domiciled in 1, 9, 12, 13, 14, 41 and 48 defendant.

“That the plaintiffs service’s agents took advantage of this system glitch to carry out over 200 transactions exposing the plaintiff to humongous liability to the tune of N33, 792, 703,656 (Thirty-Three Billion, Seven Hundred and Ninety-Two Million, Seven Hundred and Three Thousand, Six Hundred and fifty-Six Naira) received in various accounts domiciled with the 1st- 54th defendants and other financial institutions

“That by virtue of Exhibit C hereof, the Plaintiff’s Service agents/Merchant proceeded to illicitly transfer the sum/monies illegally received to various accounts domiciled with the (7, 9th, 12th, 13”, 14th, 41st and 48th Defendants to the tune of N924, 308, 819.000 (Nine Hundred and Twenty Four Million, Three Hundred and Sixty Eight Thousand Eight Hundred and Nineteen Naira) Attached and marked Exhibit C is the list of the unlawful 2nd beneficiaries accounts showing the amounts received upon complaint by the plaintiff

“That upon realizing this glitch an immediate complaint was made to the defendants and the said defendants placed a temporarily no-debit freeze on the affected accounts to avoid further dissipation of the Plaintiffs monies, as the lst of the unlawful 1st beneficiaries accounts showing the amounts received upon complaint by the plaintiff .

“That in compliance with the Central Bank of Nigeria Regulatory Framework for Banking Verification (BVN) Operations and Watchlist for the Nigerian Banking Industry, the account numbers into which the said funds were transferred through the Nigeria Inter-Bank Settlement database and the Bank Verification Numbers (BVN) of the said accounts holders/customers revealed that the perpetrators of this fraud and owners of the said accounts numbers also own several other accounts in other financial institutions with which they perpetrate their fraud Attached and marked EXHIBITS B1-B5 is the list showing the Bunk Verification Numbers of afl the unlawful 1st level beneficiaries accounts showing the names and several account’ numbers linked to the perpetrators of this humongous fraud

“That the perpetrators of this humongous fraud will illicitly transfer the said funds ito their other respective accounts domiciled with the same or other bank or financial institution and unless all the accounts linked to there respective BVNs are blocked or placed on post no debit, they will continue to unlawfully dissipate the said funds, using their other accounts.

“That if all the accounts linked to the BVN of the perpetrators of this fraud are not urgently blocked of placed on No Debit restriction and the salvaged amount unlawfully obtained reversed, they will continue in their spending spree and further dissipation of monies belonging to investors and shareholders of the Plaintiff.

“That the Central Bank of Nigeria being the apex bank in Nigeria is empowered and pursuant to Section 2(d) of the Central Bank of Nigeria Establishment Act has regulatory oversight functions over financial institutions in Nigeria, and is responsible for maintaining and promoting efficient and secured financial system in Nigeria, aimed at ensuring the safety of depositors funds in the financial institutions in Nigeria.

“That the Plaintiff has been greatly affected by the resultant effect of the system glitch and unless this application is granted, the Plaintiff will be further subjected to untoward hardship and dire financial loss.

“That the Plaintiff undertake to pay compensation to 1st to 54th defendants and the beneficiaries as to damages in the event of the reliefs and orders sought ought not to be granted.

“That the balance of convenience is in the favour of the grant of the reliefs and orders sought by the Plaintiff

“That the Plaintiff will not be able to recover the these monies from these secondary beneficiaries of these illicitly transfer sums of the reliefs and orders sought for are not granted.”

Meanwhile, Access Bank and other 53 defendants have filed their various responses to the suit.