A Federal High Court sitting in Lagos has ordered the Chinese-backed fintech giant, OPay, to freeze all bank accounts of its customers spread across thirty banks on the country’s watch list as a recovery process for ₦714 million its customers received during a system glitch. According to court documents seen by TechCabal, that system glitch occurred from 10 December 2023 to 4 March 2024 and allowed customers to get value for failed transactions.
It sent mails and called all customers who got value for sums above ₦500,000, asking them to fund their accounts so the retained funds could be debited immediately. The fintech recovered 10% of the amount from those customers after it became aware of the issue.
“While some customers responded favourably to the Applicant’s request and co-operated with the Applicant in respect of the recovery of the Erroneously Retained Credits, some customers have refused, failed and/or neglected to fund their accounts to enable the Applicant to deduct from their respective accounts the value of the Erroneously Retained Credits,” the firm told the court.
It is in this respect that fintech applied to the court to freeze all customer accounts and also provided supporting affidavit of urgency in relation to its application. Based on these, orders were made by the court for OPay, on 28 June 2024, to formally request thirty banks to restrict affected customer accounts.
OPay would not respond to comments.
OPay customers received value for pending transactions.
Successful, pending, or failed transactions are classified by bank response codes and are not from financial institutions. For OPay, the code ascribed to a holding transaction wherein the company doesn’t debit its customer is ‘RC 09’. This meant some cardholders who paid for pending transactions from December 10 did not get debited.
“The Switching Company, Interswitch, that facilitated the said card transactions between the Applicant and its Cardholders, during this period, inadvertently treated all the RC 09 transactions as successful,” OPay said in its filing.