Lotus Bank Institutes Legal Action Against 45 Financial Institutions Over N1.1bn System Glitch Loss
Lotus Bank has filed an application before a Federal High Court in Lagos against 45 financial institutions in the country.
This is in a bid to recover the sum of N1,134,491,604.31 loss as a result of system glitch that allowed customers with no debt instructions on their accounts to initiate transfers without their account being debited,
According to an affidavit sworn to by fraud investigation officer of Lotus Bank, Gbenga Ojerinde and filed before the court by a Lagos lawyer Adebayo Oyagbola, he said he has the authority of the bank to depose to the affidavit.
He said on 20 July, 2024, Lotus Bank experienced a system glitch due to a rollback fix carried out on its e-Bills Pay platform to address a complaint.
Ojerinde explained that this fix led to unexpected behaviour which allowed customers with no-debit instructions on their accounts to initiate transfers without their accounts being debited, saying that as a result of the foregoing, some customers of the bank made multiple transfers to the respondents financial institutions listed before the court beyond the balances in their accounts.
He said the glitch affected 718 customers of the bank who made successful withdrawals and transfers from their accounts without those accounts being debited.
Ojerinde explained that the initial financial exposure of the bank from this incident was about N1,134,491,604.31 as it is more comprehensively detailed in the schedule of accounts exhibited before the court.
He said Lotus Bank sought the order of the court to place restrictions on the said accounts pending the determination of the bank’s motion on Notice dated 22 July, 2024.
He stated that unless the bank’s application is granted an accelerated hearing, there is an imminent risk that the sums fraudulently transferred into the respective bank accounts domiciled with the respondents financial institutions would be dissipated.
“Any delay in the hearing of this application will severely and irreparably affect the business of the bank. The bank undertakes to pay damages if this application turns out to be frivolous,” he said.
Consequently, the court has acceded to the request of the bank.
