MTN’s Mobile Money (MoMo) Payment Service Bank, the fintech subsidiary of MTN Nigeria is said to have dragged 18 banks to court in a bid to retrieve N22.3billion ($52 million) involved in a “security breach” experienced barely a month after it officially commenced operations.
Apparently, the security breach involved the sum erroneously transferred to 8,000 accounts maintained by customers in 18 Nigerian banks.
According to reports, the fraud was committed over a total of 700,000 transactions over a one-month period. MoMo reportedly shut down the service upon realising the fraud on May 24, to prevent further liability.
In a suit filed dated May 30, MTN is said to have resorted to legal action upon the banks’ insistence that only court orders could bring action for reversal.
The affected banks, listed as defendants in the suit, include Access Bank, Ecobank, Fidelity Bank, FirstBank, First City Monument Bank, Guaranty Trust Bank, Heritage Bank, Polaris Bank, Providus Bank, Stanbic IBTC, Standard Chartered, Sterling Bank, SunTrust Bank, Union Bank, United Bank for Africa, Unity Bank, Wema Bank, and Zenith Bank.
In the suit filed by Lotanna Okoli, a senior advocate of Nigeria, on behalf of MoMo PSB, the company is seeking:
“A declaration that the deposits of an aggregate sum of N22,300,000,000.00 erroneously transferred by the plaintiff to the accounts of the customers of the defendant banks, having been done in error, belongs to the plaintiff and not the customers of the defendant banks,” the court filing reads.
“An order directing the defendant banks to each, individually, account for the sums available in their customers’ accounts and the sums which have been removed by the customers and are no longer available.
“An order directing the defendants’ banks to immediately return the aggregate sum of N22,300,000,000.00, less those funds that are no longer available, to the plaintiffs’ settlement account in the name MOMO PSB settlement account number: 2041379385 at First Bank Plc Samuel Asabia House 35 Marina, Lagos, from where the funds originated.
“An order directing the defendant banks to release all information, including account name information in respect of the accounts from which the plaintiff’s funds have been transferred to third parties, including the destination accounts and the banks in which they are held to assist in the tracing and recovery of those funds.”
This unfortunate incident is coming about 2 months after MTN’s MoMo PSB was granted final approval to commence full operations.
