Know Your Rights: You can sue if ATM fails to dispense cash despite being debited

Glitches in cash dispensing at automated teller machines (ATM) is a common occurrence in Nigeria.

On several occasions, many Nigerians have taken to social media platforms to complain about the poor quality of ATM services.

But did you know that you can take legal action if you are debited and the machine fails to dispense cash and the amount is not reversed?

There is a legal precedent that aggrieved bank customers can use as a basis to seek relief.

HOW IT HAPPENED

Moses Jwan was a customer of Ecobank and he had a debit card issued by the bank.

The problem started when he used his Ecobank card to withdraw money from an ATM complex owned by the United Bank of Africa (UBA).

He attempted to withdraw N10,000 from the money in his Ecobank account. But just as the transaction was nearing completion, it got stuck and the machine failed to dispense.

Yet, the amount was deducted from Jwan’s Ecobank account, despite not receiving the cash.

He lodged several complaints at Ecobank regarding the incident but got no favourable response from the bank.

Aggrieved by the incident, he approached the high court in Plateau state to seek redress, with Ecobank and UBA as respondents.

Jwan requested the sum of N100,020 for special damages and the sum of N500,000 as general damages for negligence.

At the high court, Jwan’s case was dismissed over his inability to properly discharge the burden of proof placed on him.

THE LEGAL PRECEDENT

The decision of the high court did not go down well with Jwan who subsequently proceeded to the appeal court.

The appeal court ruled in favour of the appellant and awarded him the sum of N500,000 as damages.

The appeal court ruled that the respondents — Ecobank and UBA — as bankers have a duty to exercise reasonable care, diligence and skill in carrying out the instructions of the appellant, which extend to ATM transactions.

The appeal court also ruled that ATM cards issued by banks are akin to cheques, which must be honoured on request once there are enough funds in the customer’s account.

The court added that the failure of the banker to honour the request of the customer in the terms of the ATM transaction is a breach of the duty of care owed to its customer.

“Therefore, the issuance of the ATM cards by the banks to its customers carries with it the duty to ensure that both the cards and the ATMs work as they are meant to and where there is the failure of these services to a customer, the banks are duty-bound to explain what happened,” the court ruled.

“This is quite common since the ATMs and their operations are under the control and management of the banks.”

The verdict has created a legal precedent that bank customers can explore if there is any form of breach of duty by financial institutions.
This story is published in partnership with Report for the World, a global service program that supports local public interest journalism.

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