Thursday, 18 July, 2024

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Court Grants OPay Permission To Freeze Customer Accounts In ₦714M Recovery Effort, After System Glitch Allows Free Purchases


Customers of OPay, a Chinese backed fintech have been able to complete card payments without getting debited and have racked up a ₦714 million bill following a system glitch.

The fintech has, however, been able to take legal action to recover the lost funds after getting approval from a Federal High Court in Lagos to freeze customer bank accounts in 30 listed banks as part of a process to recover the funds.

The system glitch that allowed people to pay for items without getting debited happened between December 10, 2023, and March 4, 2023 according to the TechCabal.

In a bid to recover the funds, OPay contacted those who received value for unsuccessful transactions that are over ₦500,000. These customers were contacted via phone and email, but only 10% obliged according to the report.

“While some customers responded positively to the Applicant’s request and cooperated with the Applicant in respect of the recovery of the Erroneosly Retained Credits, some customers have refused, failed, and/or neglected to fund their accounts to enable the Applicant to deduct the value of the Erroneously Retained Credits from their respective accounts,” the company said in a court filing.

The fintech asked the court to freeze the customer accounts and filed an affidavit of urgency alongside its application. The orders were granted by the court on June 28, 2024, and OPay will now begin asking thirty banks to restrict the affected customer accounts. OPay declined to respond to comments.

Financial institutions use bank response codes to categorise successful, pending, or failed transactions. For OPay, ‘RC 09’ is the code for a pending transaction for which the company does not debit its customer. However, from December 10, several cardholders made payments for pending transactions without getting debited.

“The Switching Company (Interswitch) that facilitated the said card transactions between the Applicant and its cardholders during this period inadvertently settled all the RC 09 transactions as successful,” OPay said in its filing.

Credit: The Nigeria Lawyer

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