Illegal Deductions by Banks: Time for CBN to Act
By Abimbola Adegoke

Have you ever audited your bank account? You may need to do that to ascertain that illegal deductions are not being made on it.

Recently, a curious but unfortunate video surfaced on the social media. In the video a young man, who had discovered that N25,000 had been deducted from his Guaranty Trust Bank account, stripped to his underpants in the bank. He created a lot of fuss in the bank until the bank staff gave him back the N25,000.

In the same vein, auto-manufacturing group, Innoson Group, and Guaranty Trust Bank have been having a running battle over illegal deductions. According to reports in the media, Innoson discovered that GTB imposed excess and unlawful charges in its current account in the sum of N560 Million and was demanding it to pay this to it with the accrued interest thereon. GTB refused this request. As a result Innoson commenced suit No: FHC/AWK/CS/139/2012 against GTB at the Federal High Court, Awka and obtained judgement in excess of N4.7 billion against GTB.

GTB appealed against the judgment to the Court of Appeal, Enugu Division in Appeal No: CA/E/288/2013. The Court of Appeal Enugu in a considered ruling ordered GTB to pay the judgment debt of N5.7 billion, inclusive of the accrued interest and any interest that would subsequently accrue thereon into an interest-yielding account in the name of the Chief Registrar of the court.

This illegal-deduction malady is not peculiar to GTB. It seems to be a common practice among banks. Money is surreptitiously deducted from the accounts of customers in amounts that they may not notice. Over a period of time, this becomes a large amount of money. Most times the amount deducted on a monthly basis is a percentage of the amount of money in the customer’s account. For accounts that do not have large amount of money in them, the amount deducted usually seems insignificant, but when aggregated as regards the number of customers that suffer such deductions unknowingly every month, it amounts to a lot.

This illegal deductions mechanism is a source of boosting the monthly earnings of banks and the target set for bank staff and branch managers. Consequently, bank customers who are supposed to earn some interest for keeping their funds with their banks end up getting fleeced secretly.

According to investigations, this is a strategy used to shore up deposits by banks. Bank staff and branches are given impossible monthly targets. By hook or by crook, staff and branches are expected to meet these targets. If within a given period of time they don’t meet such targets, there are penalties, which may include persistent verbal reprimand, loss of financial benefits, demotion, non-promotion, loss of position, or sack. Nobody wants to experience any of these, no matter how mild. Those who meet their targets are recognized and rewarded with many goodies, including cash gifts, car gifts, and promotions. In addition to this, women especially, are unnecessarily made victims of sexual harassment in their bid to rake in huge deposits. Young and beautiful girls are also given priority in bank recruitment because of the belief that they will use their youthfulness and beauty to attract men that will open accounts and do high bank transactions.

What is surprising is that the Central Bank of Nigeria does not seem to see this fraudulent act of deducting money from customers’ accounts as being serious enough to attract very strict penalty. Does one need to have the financial muscle and patience of an Innoson or the dramatic audacity of the stripping customer in the video to get reprieve?

If anytime a bank is discovered to have illegally deducted money from a customer, the bank is meant to repay the amount and pay a 100 percent interest on it from the day of the deduction to the present day and publish a full page advertorial of apology to the customer in three national newspapers, the bank would not want to attempt such an unethical practice. Matters involving illegal deductions should not be left to the courts to decide. Banks bank on using their financial muscle to wear customers out in courts and deny them justice. The CBN should have a committee that investigates illegal deductions, and once it is established that a bank is guilty of it, the full punishment should be meted out to it. A bank that is found to have illegally deducted money from customers’ accounts on three occasions should also face the risk of having its CEO suspended or removed.

What is the difference between taking one million naira from someone’s bag and taking the same one million naira from someone’s bank account by the person’s bank? Both should be seen as acts of stealing. What is the difference between the act of hacking into someone’s account and taking a million naira and a bank deducting a million naira from its customer’s account without the customer’s knowledge? Both should be treated as acts of fraud.

There is no justification for taking what belongs to another without the person’s knowledge or notice. That the money taken was already in the possession and care of the bank does not make it a lighter offence. On the contrary, it makes it a heavier offence. Banks are meant to be the bastion of integrity and trust. Banks have no product to sell. They merely collect cash deposits from different people and organisations and lend them to those who need them at an interest.

There are also other ways through which banks fleece their customers. Recently, a newspaper published the story of actress Gloria Norbert-Young who was alleged to have created a scene in her bank over some money that was not paid out to her by an ATM but was charged to her account. She had been pursuing the matter since December 2014 with no result, and decided to express her anger.

The Central Bank of Nigeria has a duty to protect bank customers from the banks. The CBN should stop treating the banks with kid gloves on the issue of illegal deductions. That the practice has continued among the banks is a testimony that the current CBN’s measures are ineffective.

Banking is a profession known for trust and integrity. It is said that integrity is what you do when nobody is watching. It is not smartness to steal the customer’s money when he or she is not watching.

Also the desperation of all the banks to be seen and called the biggest bank must be discouraged by the CBN and other organisations that give banking awards. Such awards make banks to drive their staff into prostitution, high blood pressure, heart attack, and unethical practices. Banks are always flaunting awards on the cover of newspapers. Banks should be rated by their quality of service and customer satisfaction, not by size and might.

Banks should be profitable but should not be driven by the overweening ambition to be excessively more profitable than the people and organisations they serve to the point of desperation. After all, they have no money of their own or products. It is the money of individuals and organisations that they keep in trust.

-- Abimbola Adegoke is a public affairs commentator based in Ibadan, Oyo State

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Ok

Why do banks charge for alerts

I made a transfer on Quickteller, got 3 messages. One from Safe token, one from Quickteller and one from My bank.
Only my bank charge me for the message. Why?

all banks are thie.f

Yes oh, CBN should act fast pls

CBN seems to be doing paddy-paddy with the banks.