Wrongful Bank Transfer Vs. 419 (Fraud): Difference in Money Recovery?

Bank

Entering a wrong digit when typing in bank details can instantly change the beneficiary. Same thing can apply when the correct digits are entered but the wrong bank is chosen.

You can read more about mobile money and how is it governed here.

While checking the beneficiary name can easily solve this, however as humans errors are sometimes unavoidable. Given the prevalence of these kind of scenarios many may become curious about what happens when they erroneously send money to the wrong beneficiary. Is the money long gone or are there things that can be done to recover the sum erroneously sent?

Recovery of Money Sent by Erroneous (Mistaken) Transfer

There are essentially two ways to get money back in such situations, i.e. through the bank and/or the court. Both are equally effective but often time depends on the circumstances. ​

Exploring the Bank Vs. The Court

The Bank

In situations of erroneous transfer, time is of the essence and realistically speaking it is faster to access the bank than the court, as such the first route is usually through the bank.​

As would be expected, the process at the bank is much different than the court. A major point being that the bank does not have the authority to unilaterally reverse a successful transaction. This point remains the same even where it can be shown to the bank that the transaction was made in error to the wrong person. 

The question now becomes, what then can the bank do in such instances? Why bother visiting the bank when it cannot immediately reverse the funds?​

The answer is simple. While the bank cannot immediately reverse erroneously transferred funds, they can however assist in contacting the person who received the funds. Depending on the policy the bank operates, it may provide the sender with the contact details of the receiver. This enables the sender to contact the person directly or alternatively may contact the receiver on sender’s behalf. ​

Where the receiver is contacted and confirms that the funds were indeed not for them and gives consent to reverse the money, the bank with such consent can reverse the transaction usually within a few weeks. The bank may also assist by putting a hold on the amount of the erroneously transferred funds pending when such reversal can be made.​

In this instance what is largely relied upon is the moral and legal character of whoever received the funds. But what happens where the person refuses to consent to reversing the transaction, denies receiving the sum or is unable to be contacted? ​

This is where the court being the next route comes into to play.​

The Court

Essentially where the erroneously transferred sum is below Ten Million Naira (N10 million) (which is often the case in situations like these), It is always advisable to file at the Magistrate court as it is a court of summary jurisdiction. 

The process at the court can be by a simply filed motion on notice stating the facts of the matter and attaching material evidence to show that the amount was mistakenly sent to the wrong beneficiary.

This can be by for instance stating how a difference in digit or bank details caused the situation and exhibiting evidence that the money left the senders’ account and entered into that of an unintended receiver, whether by a statement of account, transfer slip, electronic receipt such as emails or other such evidence. The motion can also be accompanied by an “affidavit of urgency” appealing to the court to hear the matter as quickly as possible to prevent the money being withdrawn. ​

Essentially, it is very important that the court is able to see that the situation is that of erroneous transfer and not one arising from fraudulent coercion or duress.​

Why Courts Differentiate between Wrongful Transfer and 419 (Fraud)

Having earlier explained wrongful transfer, Fraud, popularly known as 419 and also called ‘To obtain Credit by False Pretenses’ can be found under Section 419 of the Criminal Code (The section that it got its name from). It is defined under that section as;

(1) Any person who by any false pretense or by means of any other fraud obtains credit for
himself or any other person‐
(a) in incurring any debt or liability; or
(b) by means of an entry in a debtor and creditor account between the person giving and
the person receiving credit,

is guilty of a felony and is liable to imprisonment for three years.

In the first instance of transfer to the wrong beneficiary there is often times no relation between the sender and the receiver. The issue of erroneous transfer is simply one where a mistake in details causes a person to send funds to an unintended beneficiary, and upon proof of this, the courts can be assured that a reversal of such transaction is justice done to both parties. 

On the other hand in cases of fraud, often times the money is indeed sent to the intended beneficiary. The funds go to who the sender wants to receive it but the issues arises where there is a claim by the sender that the person who received the funds, did so because of false pretences, coercion or duress.​

There is often a relation between the sender and the receiver in such instances, whether in the form of a business transaction, an investment transaction or other similar instances. In such instances, where money was sent to who it was intended for but there are allegations that it was as a result of coercion, duress or fraud, the courts have more to consider. This is to prevent instances of a person who after entering into legitimate business transactions may out mischief or dissatisfaction with such legitimate service, simply want to recover money duly sent by claiming he/she was defrauded or coerced. Just like in the case with erroneous transfers, the courts must be assured that justice is being done to both parties

There is a greater burden of proof when dealing with allegations of fraud because while erroneous transfers are usually purely civil actions, instances of money received due to fraud, duress or coercion are not simply civil but also criminal in action with possible prison term attached.​

Effective Method for Recovery of Money Transferred as a Result of Fraud, Coercion or Duress

In such instances, the effective step to take is to make a complaint to the appropriate authorities whether the Economic and Financial Crimes Commission (EFCC), Nigerian Police or the Independent Corrupt Practices and Other Related Offences Commission (ICPC). This can be done in writing personally or through a legal practitioner.

The complaint is to be sent to the appropriate agency directly along with detailed accounts and all material evidence of the fraudulent transactions.​

Based on the complaint and evidenced received, the agencies conduct their investigations into the allegations made. Given the nature of the 419 (Fraud) and the attendant consequence such as imprisonment, an investigation into the veracity of the allegations made is a necessity. Based on their findings, they agencies have the authority to arrest, charge and prosecute the fraudulent individual to court for the criminal offence. 

The agencies may also act as an intermediary in settling the issue out of court where possible and ensuring safe refund of money extracted by means of such fraud, duress or coercion 

Conclusion

Monetary transactions and its recovery remain an intricate area. The courts and other agencies involved have to balance between true instances and instances raised by a person out to purport mischief or overturn legitimate transaction by coming under the guise of erroneous transfers or fraud. It is also up to individuals to play their part by double checking relevant details of transfers to be made and entering into business dealings only after proper research and consultations.

Written by Efe

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