Illegal charges: Customer engages Unity Bank in Legal battle


Akin Kuponiyi


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

The plaintiffs are claiming the sum of N70million 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 south west 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,

On 12th of July,2001 the bank offered the company the sum of N15million as both import finance and overdraft to finance the importation of bicycles and its spare parts.

The tenor of the loan was subsequently extended to December 2002 and later enhanced to N25million under the same terms and conditions.

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.

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 it,but the bank refused to release or return to the plaintiff’s Deed of Assignment of his property despite the plaintiff’s repeated demands for same. Rather, the bank threatened 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 is not at any material time indebted to the bank and is 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 N35.6 million 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 N35.6 million. 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

At all material time the bank is aware of the aforesaid excess and the unlawful charges but failed to refund same to the company despite the company’s letters and that of its consultant to it in that regard; and the bank’s maximum and or lending rate is the rate at which it lent money,whether overdraft or not  contained as in the various offer letters or documents evidencing the credit transactions between their very good selves, the company and the bank;

The plaintiff as a result of the action of the bank lost profit to the tune of N54million.

Consequently, the plaintiff’s claim against the defendant is the sum of N70million being special damages arising from excessive 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.

An order that the bank should release the title documents of the property known as 42 Ajoke Salako street,Ifako ,Bariga,Lagos

An order that Unity Bank pays 100% of the excess and unlawful charges imposed on the company’s current0 account.

22% interest on the entire sum claimed and on the 100% of the excess and unlawful charges which the bank imposed on the  company’s account with it from 1st January 2000 till judgment and thereafter at the same rate till satisfaction of the judgment debt.