Can You Sue a Bank for an Unauthorised Transaction in Nigeria?

Imagine checking your bank account and discovering that ₦2 million has been transferred without your permission.

You immediately report the transaction to your bank and request a reversal. The bank investigates and tells you that the transaction was successfully authenticated. It then refuses to refund the money.

At this point, two important questions arise:

Can you sue a bank for an unauthorised transaction in Nigeria?

And if the bank refuses to refund the money, what can you do to recover it?

The answer is yes, a bank can be sued where the facts establish a valid legal claim against it. However, the mere fact that a customer did not personally initiate a transaction does not automatically make the bank liable.

The circumstances surrounding the transaction must be examined carefully. This includes how the transaction was initiated, what authentication was used, whether the customer’s credentials were compromised, whether the customer disclosed any security information, what the bank’s systems detected, how quickly the transaction was reported and what the bank did after receiving the complaint.

This article explains when a bank may be liable for an unauthorised transaction, whether a bank is required to refund the money, what evidence you need, what to do if the bank refuses to reverse the transaction and when legal proceedings may be appropriate.

What Is an Unauthorised Bank Transaction?

An unauthorised bank transaction is a transaction carried out on a customer’s account without the customer’s authority.

It can include:

• Unauthorised bank transfers.
• Unauthorised ATM withdrawals.
• Unauthorised POS transactions.
• Unauthorised card payments.
• Unauthorised online payments.
• Unauthorised debits.
• Transactions resulting from compromised banking credentials.

The circumstances differ from case to case.

For example, a person may gain access to a customer’s banking application, obtain the customer’s card details through fraud, compromise the customer’s account or use other means to initiate a transaction.

The legal consequences depend substantially on how the transaction occurred.

Can You Sue a Bank for an Unauthorised Transaction?

Yes.

A customer can sue a bank where the facts establish a legally recognisable claim.

However, the customer must establish the basis of the claim.

A court will not simply order a bank to refund money because the customer says, “I did not authorise the transaction.”

The evidence surrounding the transaction must be examined.

Relevant questions include:

• How was the transaction initiated?
• What authentication was used?
• Was the customer’s device compromised?
• Was an OTP used?
• Was the customer’s PIN used?
• Did the customer disclose any security credentials?
• Did the bank detect unusual activity?
• Did the bank comply with applicable security requirements?
• When did the customer notify the bank?
• What action did the bank take after receiving the complaint?
• Can the recipient of the funds be identified?

These questions can determine whether a claim against the bank is likely to succeed.

Will a Bank Refund an Unauthorised Transaction?

Not automatically.

Whether a bank is required to refund an unauthorised transaction depends on the circumstances in which the transaction occurred and whether the bank breached a legal, contractual or applicable regulatory obligation.

A bank is entitled to investigate a disputed transaction before deciding whether to reverse or refund it. However, the bank should not treat the fact that a transaction was successfully authenticated as automatically ending the customer’s claim.

The relevant questions include:

• How was the transaction initiated?
• Was the customer’s PIN, OTP, password or other authentication credential used?
• Did the customer disclose any security credentials?
• Was the customer’s device or account compromised?
• Did the transaction display unusual or suspicious characteristics?
• Did the bank’s systems detect or respond appropriately to the transaction?
• How quickly did the customer report the transaction?
• What steps did the bank take after receiving the complaint?

Therefore, the answer to “will a bank refund an unauthorised transaction?” depends on the evidence.

Where the evidence establishes that the bank was responsible for the loss or breached a duty owed to the customer, the customer can pursue appropriate reliefs, including recovery of the money and, where justified, damages or other consequential relief.

On the other hand, where the evidence establishes that the customer’s own conduct caused or materially contributed to the loss, the bank may rely on that conduct in defending the claim.

The correct approach is therefore to establish how the transaction occurred and who bears legal responsibility, rather than assuming that either the bank or the customer is automatically liable.

What If the Bank Says the Transaction Was Authenticated?

This is one of the most common responses from banks.

The bank may say that:

• Your PIN was correctly entered.
• Your OTP was successfully used.
• Your mobile banking application was used.
• The transaction came from your registered device.
• The transaction passed the bank’s authentication system.

That evidence is relevant, but it does not necessarily end the dispute.

Authentication establishes that the bank’s system received the required credentials. It does not, by itself, answer every question concerning who actually initiated the transaction or whether the transaction resulted from fraud, compromise or another circumstance for which the bank may bear responsibility.

The particular facts must therefore be examined.

What If You Gave the Fraudster Your OTP?

This can significantly affect the case.

Suppose a fraudster impersonated your bank and persuaded you to disclose an OTP. The fraudster then used the OTP to transfer money from your account.

The bank may argue that you authorised the transaction or were negligent in disclosing the OTP.

Whether that argument succeeds depends on the circumstances.

The customer’s conduct is important, but so are the bank’s security, fraud-detection and customer-protection obligations.

A customer should therefore provide the complete facts when reporting the incident rather than withholding information that may later become relevant.

What If You Did Not Give Anyone Your PIN or OTP?

That can strengthen the customer’s position, particularly where the evidence indicates that the transaction occurred despite the customer’s security credentials not being disclosed.

The bank may still investigate how the transaction was completed.

However, where there is evidence of a compromised account, security failure, unusual transaction activity or other circumstances pointing to a failure in the bank’s systems or procedures, the customer may have grounds to pursue the bank.

The precise cause of the transaction should therefore be established rather than assumed.

What Duties Does a Bank Owe Its Customer?

The relationship between a bank and its customer is fundamentally contractual, but the bank’s obligations are also affected by applicable legislation, regulations, banking standards and the circumstances of the particular transaction.

A bank is expected to operate its banking systems with appropriate safeguards and to comply with applicable regulatory requirements.

The CBN’s payments-system framework includes measures directed at reducing electronic-payment fraud, including fraud-monitoring and authentication requirements.

Where a bank fails to comply with an applicable duty and that failure causes loss to its customer, the failure can become relevant to a claim against the bank.

What Can You Sue the Bank For?

Depending on the facts, a claim may seek:

• Recovery of the money unlawfully debited.
• Damages for losses caused by the bank’s breach of duty.
• Interest where legally recoverable.
• Appropriate declaratory relief.
• Other consequential relief supported by the evidence.

The exact reliefs should be determined after examining the transaction and the legal basis of the claim.

A lawyer should not simply file a generic action for “refund of money” without identifying the legal basis for the relief sought.

Can You Sue the Person Who Received the Money Instead?

Yes, where the facts and available evidence support such a claim.

The bank is not necessarily the only party that can be pursued.

If the person who received the funds can be identified, legal proceedings may be considered against that person.

In some circumstances, proceedings may involve both the financial institution and the recipient or other relevant parties.

The appropriate defendants depend on the facts.

What If the Money Was Transferred to Another Bank?

This does not necessarily prevent recovery.

Electronic transfers can move money between accounts held at different financial institutions.

The transaction trail, recipient account and other available information can be relevant in identifying the recipient and determining the appropriate recovery strategy.

Where there is a risk that the funds will be dissipated, urgent legal advice can be important.

What Evidence Do You Need to Sue the Bank?

Evidence is central to an unauthorised-transaction claim.

You should preserve:

• Bank statements.
• Transaction alerts.
• Transaction reference numbers.
• Screenshots of the transaction.
• Details of the recipient account.
• Your complaint to the bank.
• The bank’s response.
• Emails and text messages.
• Relevant communications with suspected fraudsters.
• Police or law-enforcement reports.
• Any other evidence relating to the transaction.

You should also document when you discovered the transaction and when you notified the bank.

The CBN’s complaints guidance similarly requires complainants to provide relevant transaction information and supporting documents, while cautioning customers not to disclose PINs and passwords in their complaints.

What If the Bank Refuses to Refund You?

If your bank refuses to refund or reverse an unauthorised transaction, do not assume that the bank’s decision is the end of the matter.

Take the following steps:

1. Obtain the bank’s position in writing

Ask the bank to provide its final response to your complaint and, where appropriate, the reason for refusing the reversal or refund.

2. Preserve your evidence

Keep your bank statements, transaction alerts, screenshots, transaction references, emails, text messages and all correspondence with the bank.

3. Escalate the complaint

Where the complaint remains unresolved, use the applicable complaint and regulatory escalation process.

The CBN’s complaints process provides a mechanism for customers to escalate unresolved complaints against financial institutions within its regulatory purview. You should first ensure that the complaint has been lodged with the relevant financial institution and that you have the appropriate complaint reference or tracking information.

4. Determine whether the recipient can be traced

The bank may not be the only party that can potentially be pursued. If the funds were transferred to another identifiable account, the recipient and other relevant parties may need to be considered.

5. Obtain legal advice

If the bank maintains its refusal despite the evidence, a lawyer can examine the transaction, identify the proper parties, determine the applicable legal claims and advise whether court proceedings are justified.

A refusal by the bank does not automatically establish that the bank is liable. Equally, the bank’s refusal does not automatically prevent you from pursuing a legal remedy.

How Do You Sue a Bank for an Unauthorised Transaction in Nigeria?

If you intend to sue a bank over an unauthorised transaction, the first step is not simply to file a lawsuit. You should establish the factual and legal basis of the claim.

A practical approach is to:

1. Report the transaction to the bank immediately.
2. Obtain a complaint or reference number.
3. Request the bank’s investigation and final position in writing.
4. Obtain your relevant bank statements and transaction records.
5. Preserve transaction alerts, screenshots and other electronic evidence.
6. Establish how the transaction was initiated and authenticated.
7. Determine whether the customer’s conduct contributed to the loss.
8. Identify the recipient of the funds where possible.
9. Determine whether the bank, the recipient or other parties should be made defendants.
10. Identify the appropriate cause or causes of action and the reliefs that should be claimed.
11. Commence proceedings in the appropriate court where litigation is justified.

The fact that a customer has reported an unauthorised transaction does not, by itself, determine the outcome of the case. The evidence must establish why the bank should be held legally responsible for the loss.

In some cases, the appropriate claim will focus on the bank’s conduct or failure to comply with an applicable duty. In others, the principal recovery claim may need to be directed against the person who received or misappropriated the funds.

For that reason, a proper investigation should precede litigation.

What Can You Claim From the Bank?

Depending on the facts and the legal basis of the claim, the reliefs sought can include:

• Recovery of the money unlawfully debited;
• Damages for loss caused by the bank’s breach of duty;
• Interest where legally recoverable;
• Appropriate declaratory relief; and
• Other consequential reliefs supported by the evidence.

The reliefs should be carefully formulated to correspond with the facts and legal basis of the claim.

Do You Have to Complain to the CBN Before Suing the Bank?

A customer should distinguish between regulatory complaint procedures and court proceedings.

The CBN’s complaints process is an important avenue for resolving disputes with regulated financial institutions.

However, complaint to the CBN Consumer Protection Department is not a condition precedent to commencing an action against a bank.

A lawyer should examine the circumstances before deciding the appropriate route.

Do not assume that filing a CBN complaint automatically replaces the need for court proceedings.

What If the Bank Says It Was Your Fault?

The bank may defend the claim by alleging that the customer’s conduct caused or contributed to the loss.

For example, the bank may allege that the customer:

• Disclosed an OTP.
• Disclosed a PIN.
• Shared a password.
• Allowed another person access to the banking application.
• Failed to report the compromise promptly.
• Ignored security warnings.

Such allegations can be important.

However, the bank’s allegation should be tested against the evidence.

The court will consider the circumstances rather than simply accepting either party’s assertion.

What If the Fraud Happened Through Social Engineering?

Social engineering occurs where a fraudster manipulates a customer into taking an action that enables the fraud.

For example, a fraudster may impersonate:

• A bank employee.
• A police officer.
• A telecommunications representative.
• A friend or family member.
• A government official.

The fraudster may persuade the customer to disclose information or perform a transaction.

This type of fraud requires careful analysis because the customer may have physically entered the transaction even though the transaction was induced by deception.

The legal position is therefore different from a case where a third party accessed the account without the customer’s participation.

What About Authorised Push Payment Fraud?

Authorised push payment fraud deserves particular attention.

This occurs where a fraudster deceives a customer into authorising a transfer to the fraudster’s account.

The CBN published draft Guidelines for Handling Authorised Push Payment Fraud in 2025. The draft contemplated circumstances in which customers could qualify for reimbursement and also identified circumstances in which reimbursement would not be required, including customer negligence and delayed reporting.

Because those were draft guidelines, they should not be presented as though they automatically establish the current legal position in every APP-fraud case.

The distinction is nevertheless important because it demonstrates why the circumstances surrounding the customer’s authorisation matter.

How Quickly Should You Report the Fraud?

Immediately.

Do not wait until you have decided whether to sue.

Contact your bank as soon as you discover the unauthorised transaction.

The CBN’s consumer-protection materials advise customers to take immediate steps when they observe a compromise involving their personal information and to lodge complaints promptly and honestly.

Prompt reporting can also assist the bank and other financial institutions in tracing or restricting suspicious transactions.

The CBN has continued to strengthen its electronic-fraud response framework, including measures aimed at improving fraud detection and response times.

What Should You Do Before Suing Your Bank?

If you are considering legal action:

1. Report the transaction to your bank immediately.
2. Obtain a complaint reference number.
3. Request the bank’s investigation and final position in writing.
4. Preserve your account statements and transaction records.
5. Preserve all electronic communications.
6. Report suspected criminal conduct to the appropriate authorities where necessary.
7. Escalate the complaint through the applicable regulatory process where appropriate.
8. Consult a lawyer with the complete evidence.
9. Determine the proper parties to sue.
10. Identify the appropriate legal claims and reliefs before commencing proceedings.

Should You Sue the Bank or the Recipient of the Money?

This is not always an either-or question.

The correct defendant depends on what actually happened.

For example:

If the bank’s system or conduct caused the loss:
The bank may be a proper defendant.

If a fraudster obtained the money and the bank was not responsible for the transaction:
The recipient may be the more appropriate party to pursue.

If both the bank’s conduct and the recipient’s conduct are relevant:
Proceedings may need to address both.

This is why a proper investigation should precede litigation.

Can You Recover Your Money Through Court?

Yes, where the evidence establishes a legally sustainable claim.

The court can grant appropriate relief where a claimant proves the case.

The remedy available will depend on the legal basis of the claim, the parties before the court and the evidence presented.

Where the recipient of the money can be identified, the court process can also be used to pursue recovery from the appropriate party.

What If the Amount Involved Is Small?

The amount involved does not determine whether the transaction was unlawful.

However, litigation has costs, and the proportionality of commencing proceedings should be considered.

For smaller amounts, a customer may first pursue the bank’s internal complaints mechanism and applicable regulatory complaint process.

For substantial losses, particularly where the bank has rejected the claim, obtaining legal advice promptly is advisable.

Common Mistakes Customers Make

Customers dealing with unauthorised transactions often make the following mistakes:

Waiting too long

The longer you wait, the more difficult it can become to trace the funds.

Making only verbal complaints

A formal written complaint creates a record.

Deleting evidence

Transaction alerts, messages and screenshots can become important evidence.

The timing of your complaint is also important. Keep evidence showing when you discovered the transaction, when you reported it to the bank and what action the bank took after receiving your complaint. Where the funds were transferred to another account, preserve any information that can assist in identifying the recipient and tracing the transaction.

Assuming authentication ends the matter

The fact that an OTP or PIN was used does not automatically answer every question concerning liability.

Suing without identifying the proper defendant

The person who received the money and the bank do not necessarily bear the same legal responsibility.

Making unsupported accusations

Do not make public accusations against individuals or institutions without an appropriate factual and legal basis.

How Lexforte Attorneys Can Help

Lexforte Attorneys advises individuals and businesses involved in banking and financial disputes.

We can assist with:

• Unauthorised bank transaction disputes.
• Bank fraud and electronic-payment disputes.
• Complaints against financial institutions.
• Recovery of funds lost through fraudulent transactions.
• Regulatory complaints.
• Legal correspondence with banks.
• Civil recovery proceedings.
• Court proceedings against banks and other relevant parties.

If your bank has refused to reverse an unauthorised transaction, we can review the facts and advise you on the appropriate legal and regulatory options.

Conclusion

Can you sue a bank for an unauthorised transaction in Nigeria?

Yes.

But the fact that a transaction was unauthorised from the customer’s perspective does not automatically establish that the bank is liable.

The circumstances of the transaction must be examined carefully.

The bank’s authentication records, the customer’s conduct, the security measures employed, the timing of the complaint, the bank’s response and the applicable regulatory and contractual obligations can all be relevant.

If your bank refuses to refund an unauthorised transaction, do not assume that the bank’s decision is the final word. Make a formal complaint, preserve your evidence, use the appropriate regulatory complaint process and obtain legal advice where necessary.

Most importantly, act quickly.

The sooner the transaction is reported and the evidence preserved, the better positioned you are to pursue an appropriate remedy.

If your bank has refused to reverse an unauthorised transaction, contact Lexforte Attorneys for professional advice on your recovery and legal options.