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Home News Customer engages Unity Bank in legal battle over illegal charges

Customer engages Unity Bank in legal battle over illegal charges

by djmedz

Customer engages Unity Bank in legal battle over illegal charges

Customer engages Unity Bank in legal battle over illegal charges

A customer of Unity Bank Plc, Innocent Okafor and his company Lexin Agric&Cycles Limited have renewed their legal battle against the bank over excessive and illegal bank charges.

The plaintiffs are claiming the sum of N70 million being special damages arising from excessive, wrongful charges and loss of business profit.

In an amended statement of claim filed before a Federal High Court, sitting in Lagos, Southwest Nigeria, the plaintiffs alleged that Lexin Agric &Cycles company started banking with bank of the North Limited which was later acquired or taken over by Unity Bank Plc,

The statement claimed that on 12th of July, 2001 the bank offered the company the sum of N15 million as both import finance and overdraft to finance the importation of bicycles and its spare parts.

It said the tenor of the loan was subsequently extended to December 2002 and later enhanced to N25 million under the same terms and conditions.

The statement stated that when the company evinced an intention to utilize the facility, the bank insisted that it must first provide 30% of the total sum, which it did.

It added that Innocent Okafor gave the original copy of the deed of Assignment of his property known as 42 Ajoke Salako Street, Ifako Bariga to the bank dated 4th January, 2000, however none of the plaintiffs executed any legal mortgage in respect of the property in favour of the bank or any other party in connection with the loan.

The plaintiffs alleged further that the company has repaid the bank all the money that it owed, but that the bank refused to release or return to the plaintiffs the deed of Assignment of his property despite the plaintiffs’ repeated demands for same, as the bank threatens to sell the property.

The plaintiffs alleged further that Unity Bank imposed all types of illegal charges, interest and commissions on the company’s account.

The company contended that it was not at any material time indebted to the bank and was not owing any money to the bank.

The company instructed a consulting firm to audit or reconcile its account from January 2000 to July 2008. The audited account and report showed that the company paid the bank the sum of N35,689,041.74 in excess as a result of excessive/wrongful charges,irregular debit and so on.

The consulting firm sent the reconciliation report to the bank as well as request to refund the sum of N35,689,041.74. till date the bank refused to pay the company the said sum.

By the relevant provisions of the Central Bank Monetary, Credit, Foreign Guidelines applicable at the material time-2000-2008 , under payment or excessive charges shall be refunded within two weeks of the discovery of the customer’s complaint with interest at the bank’s maximum leading rate, on the date of refund along with a letter of apology to the customer; and any bank that fails to comply with this provision shall, in addition to the refund to the customer be liable to a penalty amounting to 100% of the amount involved.

Consequently, the plaintiffs’ claim against the defendant is the sum of N70 million being special damages arising from excess wrongful charges loss of business, and the bank’s breach of the import finance facility to carry out the company’s instruction regarding letter of credit and payments for goods it imported.

The plaintiffs sought an order that the bank should release the title documents of the property known as 42 Ajoke Salako Street, Ifako, Bariga ,Lagos, and an order that Unity bank pays 100% of the excess and unlawful charges imposed on the company’s current account.

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