How to Recover Money Wrongfully Deducted by a Bank in Nigeria

A bank account is maintained on the basis that the bank will keep an accurate record of the customer’s funds and will only debit the account in accordance with the customer’s instructions, the terms governing the account, or a lawful authority.

Where a bank wrongfully deducts money from a customer’s account, the customer is entitled to challenge the deduction and seek recovery of the money.

A wrongful deduction can arise from an unauthorised transaction, an erroneous debit, excessive or unauthorised bank charges, a duplicate debit, a failed transaction that was nevertheless debited, or an error in the bank’s calculation of the customer’s indebtedness.

The Central Bank of Nigeria’s Consumer Protection Framework expressly recognises unauthorised or erroneous debits, excess charges and financial loss resulting from staff negligence or fraudulent activities as categories of complaints that banks’ customer-compensation policies should address.

This article explains what to do when a bank wrongfully deducts money from your account and the legal remedies available for recovering the money.

What Is a Wrongful Bank Deduction?

A wrongful bank deduction occurs where a bank debits a customer’s account without a valid basis.

Examples include:

• A debit that the customer did not authorise.
• A bank charge that was not permitted.
• A duplicate debit for the same transaction.
• A failed ATM transaction where the account was debited but cash was not dispensed.
• A POS or electronic transaction that was reversed by the merchant but not credited back to the customer.
• A bank debiting the wrong amount.
• A bank deducting money based on an erroneous calculation.
• An unauthorised transfer from the customer’s account.
• Excessive or unlawful charges.
• A debit made after the customer has already settled the relevant obligation.

The precise legal position depends on the circumstances of the deduction.

Can a Bank Debit Your Account Without Your Permission?

A bank cannot simply debit a customer’s account whenever it wishes.

There are, however, circumstances in which a bank can debit an account without obtaining a fresh instruction from the customer. These include legitimate charges authorised by the applicable terms and conditions, statutory deductions, repayment of obligations where the bank has a valid contractual right of set-off, and other deductions authorised by law or the account agreement.

The important question is therefore not merely whether the customer gave a specific instruction immediately before the debit.

The question is whether the bank had a lawful or contractual basis for making the debit.

Where there is no such basis, the customer can challenge the debit.

What Are Common Examples of Wrongful Bank Deductions?

Unauthorised Electronic Transfer

Money can be transferred from an account through internet banking, mobile banking, USSD or another electronic channel without the customer’s authority.

Where the customer did not authorise the transaction, the customer should immediately notify the bank and request investigation and reversal.

Failed ATM Transaction

An ATM transaction can fail while the customer’s account is nevertheless debited.

For example, a customer attempts to withdraw ₦100,000, the ATM does not dispense the money, but the account statement shows a ₦100,000 debit.

The customer should report the transaction immediately and request reversal.

Wrongful Bank Charges

A bank can also wrongfully deduct money by imposing charges that are not authorised or exceed the applicable limits.

The CBN’s Guide to Charges sets out charges applicable to banking services and provides sanctions where a financial institution wrongfully imposes a particular charge on a customer.

Duplicate Debit

A customer can sometimes be charged twice for one transaction.

Where only one transaction occurred but two debits appear on the account, the customer should notify the bank and request correction of the account.

Erroneous Debit

A bank can make an accounting or calculation error and debit the customer’s account with an amount that is not actually owed.

Nigerian appellate decisions recognise that a bank’s wrongful debit can constitute a breach of the bank’s obligations to its customer.

In Union Bank of Nigeria Plc v. E.D. Emole, the court considered a situation where the bank wrongly debited the customer’s account as a result of an error and treated the wrongful debit as a breach of the bank’s duty to maintain a proper and accurate account.

What Should You Do When a Bank Wrongfully Deducts Money?

The customer should act promptly.

1. Obtain Your Bank Statement

First obtain a statement or transaction history showing the disputed debit.

Identify:

• The date of the debit.
• The amount.
• The transaction description.
• The transaction reference.
• The account into which the money was transferred, where available.
• Any applicable bank charges.

Do not simply tell the bank that “money was removed.” Identify the specific transaction.

This is important because a customer bringing a legal claim must be able to identify and prove the particular debit being challenged.

In Alhaji Aminu Hamisu Usman v. First Bank of Nigeria Plc, the Court of Appeal criticised a party who merely tendered a statement of account containing numerous alleged unauthorised charges without identifying the specific entries and explaining why they were unauthorised.

2. Report the Debit to the Bank Immediately

Contact the bank through its official complaint channels.

Where the transaction is unauthorised, report it as soon as possible.

The complaint should identify the disputed transaction and clearly state that you did not authorise it, where that is the case.

3. Make the Complaint in Writing

Do not rely solely on a telephone conversation.

Submit a written complaint through the bank’s official complaint channel and retain evidence that it was submitted.

The CBN advises customers to submit written complaints to their banks and obtain an acknowledgement for their records.

4. Request Reversal

Clearly state what you want the bank to do.

For example:

I request the immediate reversal and re-crediting of the sum of ₦500,000 wrongfully debited from my account on 20 August 2026.

Where appropriate, request that the bank provide the result of its investigation in writing.

5. Preserve the Evidence

Keep:

• Bank statements.
• SMS alerts.
• Email alerts.
• Transaction receipts.
• ATM slips.
• POS receipts.
• Screenshots.
• Complaint reference numbers.
• Emails to the bank.
• The bank’s responses.
• Relevant contracts or invoices.
• Evidence showing that you did not authorise the transaction.

These documents can become important if the dispute is escalated.

What Should You Include in a Complaint to the Bank?

A proper complaint should clearly explain what happened, when it happened, where or through what channel it happened, the financial loss suffered and what you want the bank to do.

The CBN has specifically advised consumers to state the relevant facts, the monetary loss, the date and time of the incident, the financial product or service involved and the remedy requested.

Your complaint should therefore contain:

1. Your name and contact details.
2. Account name and account number.
3. Date of the disputed transaction.
4. Amount wrongfully deducted.
5. Transaction reference.
6. Description of the transaction.
7. Explanation of why the debit is wrongful.
8. Supporting documents.
9. The remedy you seek.
10. Your signature or other required authentication.

How Long Should You Wait for the Bank to Reverse the Money?

The time required depends on the nature of the transaction and the investigation required.

Some transaction errors can be resolved relatively quickly, while disputed electronic transactions, fraud-related complaints or interbank transactions can require further investigation.

The important point is to obtain a complaint reference number and keep evidence of when the complaint was submitted.

The CBN’s Consumer Protection Framework requires financial institutions to have complaint-handling mechanisms and customer compensation policies addressing matters including unauthorised or erroneous debits and excess charges.

What If the Bank Says the Debit Was Authorised?

If the bank disputes your allegation and says that the transaction was authorised, ask the bank to provide the basis for that position.

The bank should be able to identify the transaction and explain the basis upon which it was processed.

Depending on the transaction, relevant evidence can include:

• transaction logs;
• mandate or instruction;
• electronic authentication records;
• debit card records;
• account statements;
• transfer details; and
• other records relating to the transaction.

If the matter cannot be resolved administratively, the available evidence becomes important in any subsequent legal proceedings.

What If the Bank Says the Money Was Transferred to Another Person?

Where money was transferred from your account to another account without your authority, the bank should investigate the transaction.

The identity of the recipient, the transaction channel and the circumstances surrounding the transfer are relevant.

The bank may also need to engage the recipient’s bank where the money was transferred to another financial institution.

You should not attempt to recover the money personally from the recipient through threats or other informal means. The proper banking and legal channels should be used.

What If the Bank Refuses to Reverse the Money?

If the bank refuses to reverse a disputed debit, ask the bank to give its decision and reasons in writing.

You should also retain the complaint reference and all correspondence.

If the dispute remains unresolved after the bank’s internal complaint process, you can escalate the complaint through the appropriate regulatory complaint mechanism.

The CBN’s consumer-protection materials state that where a complaint is not resolved within the applicable period, a customer can escalate the matter to the CBN’s Consumer Protection Department.

The CBN also operates a consumer complaint service through which complaints can be submitted and tracked.

Can You Complain to the CBN About a Wrongful Bank Deduction?

Yes.

A customer who has exhausted the bank’s internal complaint process without satisfactory resolution can escalate the complaint to the CBN through the appropriate consumer-protection channel.

The CBN has a Consumer Protection Department responsible for handling complaints involving regulated financial institutions.

The CBN’s published guidance confirms that customers can lodge complaints against their banks and escalate unresolved complaints to the CBN.

However, a CBN complaint should not replace proper legal advice where the dispute involves substantial sums, complicated facts or a claim for damages.

Can You Sue a Bank for Wrongfully Deducting Money?

Yes.

Where a bank wrongfully debits a customer’s account and refuses to correct the account, the customer can pursue legal proceedings to recover the money and seek other appropriate reliefs.

Nigerian court decisions recognise that wrongful debiting of a customer’s account can constitute a breach of the banker-customer relationship.

In Unity Bank Plc v. Aliyu Adamu & Ors, the court considered claims arising from wrongful debits to customers’ accounts and the respondents’ demand for re-crediting of the wrongfully debited amounts.

The precise cause of action and remedies depend on the circumstances.

What Can You Claim Against the Bank?

Depending on the facts, a customer can seek:

Refund or Re-crediting of the Wrongfully Deducted Money

The primary remedy is ordinarily the restoration of the money wrongfully deducted.

Interest

Where legally recoverable, the customer can claim interest on the amount wrongfully withheld.

Damages

Where the facts establish a legal basis for damages, the customer can seek appropriate damages.

The availability and amount of damages depend on the nature of the bank’s conduct and the loss established.

Other Appropriate Reliefs

Depending on the circumstances, the customer can seek declaratory, injunctive or other appropriate reliefs.

The reliefs claimed should correspond to the actual legal wrong established by the evidence.

Do You Need a Lawyer to Recover Wrongfully Deducted Money?

Not necessarily.

For a straightforward banking error involving a small amount, the customer can initially pursue the bank’s internal complaint process without a lawyer.

However, legal advice becomes particularly important where:

• the amount involved is substantial;
• the bank denies responsibility;
• the transaction is alleged to be fraudulent;
• the bank refuses to reverse the debit;
• the bank has frozen or restricted the account;
• the customer has suffered additional financial loss;
• the dispute has continued despite repeated complaints; or
• litigation is being considered.

A lawyer can assess the evidence and determine the appropriate remedy.

What Evidence Do You Need to Recover Wrongfully Deducted Money?

The strength of a claim depends significantly on the evidence.

Important documents include:

Bank Statement

This establishes the debit and the amount involved.

Transaction Alert

An SMS, email or mobile-banking alert can help establish when the debit occurred.

Complaint to the Bank

The complaint demonstrates that the customer promptly disputed the transaction.

Bank’s Response

Any response from the bank can be important, particularly if the bank acknowledges the error or explains its position.

Transaction Records

Receipts, transfer references, ATM slips and other transaction records can help establish what happened.

Supporting Documents

Where the dispute concerns a particular payment or obligation, contracts, invoices, receipts or other relevant documents can help establish the circumstances.

What If the Bank Wrongfully Deducted Money Several Times?

The customer should identify each individual debit.

Do not simply state that the bank made “several unauthorised deductions.”

Prepare a schedule showing:

This makes it easier for the bank to investigate and, if necessary, for a lawyer to formulate a claim.

The importance of identifying individual disputed transactions is demonstrated by Alhaji Aminu Hamisu Usman v. First Bank of Nigeria Plc, where the court considered the failure to properly identify and explain alleged unauthorised charges.

Can a Bank Be Liable for an Error in Its Own Calculation?

Yes.

A bank owes contractual obligations to its customer and is expected to maintain proper and accurate records of the customer’s account.

In Union Bank of Nigeria Plc v. E.D. Emole, the court considered a situation where the bank wrongly debited the customer’s account because of an erroneous calculation and treated the conduct as a breach of the bank’s duty to maintain a proper and accurate account.

The principle is straightforward: a bank cannot debit a customer’s account with money that the customer does not owe simply because the bank made an internal accounting error.

What If the Bank Says the Deduction Was a Bank Charge?

Ask the bank to identify the specific charge.

Not every charge imposed by a bank is automatically unlawful. Banks can impose charges permitted by applicable rules and the contractual terms governing the account.

However, where a customer believes that a charge is excessive, unauthorised or otherwise contrary to applicable rules, the customer can challenge it.

The CBN’s Guide to Charges regulates bank charges and provides sanctions for wrongful charges.

Can You Recover Money Wrongfully Deducted by a Bank Through the CBN?

The CBN complaint mechanism can result in a bank reviewing and resolving a customer’s complaint.

The CBN’s Consumer Protection Framework requires financial institutions to have customer compensation policies addressing specified service failures, including unauthorised or erroneous debits and excess charges.

However, the CBN complaint process should not be confused with a civil action for damages.

Where a customer intends to pursue substantial damages or complex legal reliefs, the appropriate court proceedings should be considered separately.

How Long Do You Have to Recover Money Wrongfully Deducted by a Bank?

A customer should act as soon as the wrongful deduction is discovered.

Prompt reporting is particularly important for unauthorised electronic transactions because the bank may need to investigate transaction records and take steps to trace or preserve the funds.

The customer should also consider applicable limitation rules before commencing legal proceedings.

Do not assume that because a debit occurred some time ago, the claim can be pursued indefinitely.

Can You Recover Money Wrongfully Deducted From a Business Account?

Yes.

The same basic principles apply to business and corporate accounts, although the contractual arrangements and evidence can be more extensive.

A company challenging a wrongful debit should preserve:

• account-opening documents;
• account mandates;
• board resolutions where relevant;
• bank statements;
• transaction records;
• correspondence;
• accounting records; and
• evidence of the financial consequences of the debit.

The identity of the proper claimant and authorised representatives should also be properly established before legal proceedings are commenced.

Conclusion

A bank does not have an unrestricted right to debit a customer’s account.

Where money has been wrongfully deducted, the customer should identify the disputed transaction, obtain the relevant account records, make a written complaint to the bank and request reversal.

If the bank refuses to resolve the matter, the customer can escalate the complaint through the appropriate regulatory channel and, where necessary, pursue legal proceedings to recover the money and seek other reliefs supported by the facts and law.

The CBN’s Consumer Protection Framework specifically recognises unauthorised and erroneous debits and excess charges as matters that financial institutions’ customer-compensation policies should address.

The most important practical step is to document the exact debit being challenged. A customer who simply alleges that the bank “wrongfully took money” without identifying the transaction, amount, date and basis of the complaint can encounter evidential difficulties.

If your bank has wrongfully deducted money from your account and refuses to reverse the debit, Lexforte Attorneys can review the transaction records, assess the bank’s legal position and advise on the appropriate steps for recovering the money.