THE ATM CARD ISSUED BY A BANK IS AKIN TO A CHEQUE
The fact is that every bank needs its customers in other to survive. As such, global best practice is to ensure that every bank does carry out its duties to its customers without waiting for regulatory sanctions. Hence, every sharp and unethical practice must be avoided or else, the bank that becomes a culprit may be exposed to regulatory sanctions in addition to serious claims in damages by the aggrieved customers. This could occasion dwindling cash reserves and in extreme cases, a run on the bank which may culminate in the folding of the bank and its eventual winding-up.
Be that as it may, this article aims at reviewing duties and possible remedies for the derelict of banks to their customers.
DEFINITION OF TERMS
Here, duty means a task or action that one is required to perform as part of one‟s job. A duty can also mean a moral or legal obligation, that is to say, a responsibility. Dictionary.com also defines duty to mean an action or task required by a person‟s position or occupation, that is to say, function.
In the eye of the law, remedies are the means with which the court of law in exercise of its civil law jurisdictions, enforces a right and imposes a penalty or makes a court order so as to impose its will.
This simply means an infraction or violation as of law, trust, faith or promise. It also means a violation or infraction as of a contract law, legal obligations or promise. In other words, it means to break or violate an agreement.
From the foregoing therefore, there are certain duties which banks and bankers alike owe to its customers. They are as follows:
- Bankers should not disclose any personal information given by customers to a third party.
- Banks should also maintain all details of transaction made by the customer.
- Duty to provide customer with statement of account on a regular basis in other to afford him the opportunity of reconciling his books with that of the bank.
- Duty to collect cash, cheque and other payable instruments from or on behalf of the customer.
- It is the duty of the bank to follow instructions given by the customers. If the customer has not given any instructions, the bank should act as per rules and regulations.
On the other hand, the duties of customers to banks are as follows:
- The cheque should be filled by customers very carefully.
- If the cheque book is lost or stolen, it is the duty of the customers to inform the bank.
- In the case of any disagreement in the bank statement, customers should inform the bank.
- It is the duty of the customers to present the instrument of credit within the due time from the date of issue.
- Customer should provide proper information in the Know Your Customer (KYC) form.
- It is also the duty of the customers to read the MITC (Most Important Terms and Conditions).
Moreover, it is trite that once the bank breaches any of these duties (aforementioned) to any of its customers, then the customer shall be entitled to any of the possible remedies available in law. In this case, the court can basically grant any of the following reliefs to the customer who is aggrieved by the conduct of the bank. They are as follows:
This is a sum of money awarded by a court to compensate a party for losses suffered as a result of his contract being breached. Generally, damages are not punitive but compensatory. Punitive here means inflicting punishment. So the exact sum to be paid as damages is predicated on the subject matter on the contract, the nature and the extent of the breach.
This is a specialized remedy used by courts when no other remedy (such as money) will adequately compensate the other party. If a legal remedy will put the injured party in the position he or she would have enjoyed had the contract been fully performed, then the court will use that option instead.
The most common reason courts grant specific performance is that the subject of the contract is unique, when it‟s not merely a matter of money or where the true amount of damages is unclear. When a contract is for the sale of a unique property, for instance, mere money damages may not remedy the purchaser‟s situation.
Example, Mike offers to buy Ken‟s house and Ken accepts, but later decides to keep the property. Real estate is considered to be unique. And since there is no other piece of property or house exactly like Ken‟s, Mike may be entitled to specific performance on the contract. Ken would be compelled to go through with the sale.
This is the abrogation of a contract, effective from its inception, thereby restoring the parties to the positions they would have occupied if no contract had ever been formed (Grist v Bailey).
In the event of a breach of contract, rescission is the remedy sought to bring the contract to an end, allowing the innocent party to perform no further, recover any part performance and seek damages. It is therefore an equitable remedy and will not be granted unless restitution in integrum can be made—“restitution of the parties” pre-contractual state.
This is a latin maxim which means „the amount he deserves‟ or „as much as he has earned‟. An action in quantum meruit is available to recover money or services or goods supplied to a defendant in circumstances where the claimant is not recompensed by performing his obligations or supplying the goods. The claimant must usually show that the defendant expressly or impliedly requested or freely accepted the services or goods in question.
A claim in quantum meruit cannot arise if the parties have a contract to pay an agreed sum. In such circumstances, the parties‟ relationship is governed by the law of contract.
However, a claim for quantum meruit may arise where the parties:
I. Have not agreed to a contract, or there is a so-called quasi-contract. For example, the parties may have agreed some of the contractual terms, but may have failed to reach an agreement on an essential term, such as price.
II. Have no fixed price for the services or goods supplied.
III. Have an agreement to pay a reasonable sum for the services or goods supplied.
IV. Have agreed a scope of work under the original contract and the work carried out falls outside that scope.
In law, it is a remedy that is normally granted where the aggrieved party can prove that there was a mistake when the agreement was being reduced to writing. To achieve this, the claimant must show as follows:
I. That the parties had a clear agreement on the terms.
II. The agreement has never changed, until it was reduced to writing.
III. The written agreement was not a reflection of the agreement of the parties. (Weeds v. Blaney).
Having highlighted the reliefs available to an aggrieved customer in the event of a breach of duty by a bank or banker, in this concept, the award damages is the most common relief available to the customer.
„ATM is like a cheque and failure to dispense cash is a breach of banker/customer duty‟. See Moses Jwan v. Ecobank (2021) 10 NWLR (pt. 1785) 449 (CA) @ 485.
The Court of Appeal has held in the above case that failure of a bank to pay a customer through the ATM when the customer has enough money in the account is a breach of duty of care and contract. The customer therefore entitled to damages.
Per Aliyu JCA stated in the aforesaid case that:
“The ATM card issued by a bank is akin to a cheque, must be honoured on request once there is enough funds in the customer‟s account and failure to do that means the bank is in breach of duty of care owed to its customer.”
Consequently, the Court of Appeal awarded the sum of N500, 000 (Five Hundred Thousand Naira) as general damages against Eco Bank for failure to pay its customer the sum of N10,000 (Ten Thousand Naira) through the bank‟s ATM.
It remains for banking services to improve and for aggrieved customers to hold banks to higher standards by seeking the protection of their legal rights especially in the light of precedents such as the aforesaid Moses Jwan‟s case.
Asides judicial remedies, in a situation where a bank wrongly dishonours a customer‟s cheque, the bank ought to also be fined by the Central Bank of Nigeria in the exercise and discharge of latter‟s regulatory authority. This should be apart from the reliefs available to an aggrieved customer, in terms of damages and specific performance.
In conclusion, it is the duty of a bank/banker to perform all the duties it owes the customers. In the event of failure to perform these duties or there is a breach of these duties, the bank will be exposed to action in damages or other equitable remedies like specific performance, injunction, rescission or rectification. The bank/banker must therefore carry out its duties with all the care and diligence required of them even by law and international best practice.
Onyedikachi Ezebilo, Esq.
Helig Mor Attorneys, Lagos