MTN’s MoMo PSB In N23bn Fraud Scandal One-month After Launch

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Momo Payment Service Bank Limited (MPSBL), the FinTech subsidiary of MTN Nigeria Communications Plc, has been enmeshed in a N23 billion scandal following a system exploitation that credited 8,000 accounts belonging to customers.

One month after its launch, the FinTech approached the Federal High Court to compel 18 commercial banks to refund the N23 billion, which it said was erroneously transferred to their customers.

According to MPSBL, the funds were erroneously and fraudulently transferred in 700,000 transactions into about 8,000 accounts.

The subsidiary also urged the court to order the banks to provide information about the customers into whose accounts the funds were mistakenly paid.

The requests form part of the reliefs in a suit filed by MPSBL through its lawyer, Lotana Okoli (SAN).

MPSBL averred that under the Central Bank of Nigeria (CBN) Regulation on Instant (Inter-Bank) Electronic Funds Transfer Services, made pursuant to sections 2(D), 33(1)6) and 47(2) of the CBN Act 2007,it is incumbent on the banks to make refunds and provide the required information.

MPSBL’s Chief Executive Officer (CEO), Anthony Usoro Anthony said in a supporting affidavit that his bank suffered “a system exploitation” on May 24, 2022, during which 700,000 transactions were processed with credits being made into about 8,000 accounts in the 18 banks being requested to make the refunds.

Anthony averred that upon becoming aware of the incident, MPSBL’s management shut down the service to limit the impact and triggered engagements with the defendants (the 18 banks) through the Nigeria Inter-Bank Settlement System (NIBSS) for the commencement of recovery activities from the accounts of the various beneficiaries in the various banks.

“We were able, through system checks, to confirm the banks and accounts into which the various sums of money were transferred into.

“We were also able to confirm how much was paid into each bank account in total. The said list of accounts which received the funds was made available to the respective banks as a preliminary step to mitigate the applicant’s losses.

“The transfers were due to the fact that the plaintiff suffered a system exploitation which led to the said debits.

“There is no transaction between the plaintiff and the recipient account holders that warranted the transfer of the funds to those account,” he added.

Anthony, however, explained that his organisation’s resort to the court was informed by the banks’ insistence that they needed to be ordered by the court before they could act.

The MPSBL CEO stated that the organisation was “carrying out investigations internally and externally to ascertain the actual cause of the debits.”

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