In what appears to be a case of fraudulent manipulation of customers’ accounts and utter violation of banking ethics, the Ijebu-Ode, Ogun State branch of First City Monument Bank Plc, has been accused of illegal loan transactions targeted at defrauding unsuspecting customers.
One of the customers, who blew the whistle, Mr Kolawole Adepoju, had obtained a loan worth about N2.55 million from the bank in 2013, with expiration tenor scheduled for late last year. But a phantom loan top-up on his account, which he never applied nor requested for, and which he also never got to withdraw, has now taken his repayment tenor to 2019.
This case, according to findings, is besides other complaints of loan fraud and illegal charges, especially in the same Ijebu-Ode 2 branch of FCMB, and similar complaints arising from various branches of the bank, which an insider source told our correspondent was giving the Group Internal Audit department of the bank grave concerns. Adepoju had, in May 2013, obtained a loan facility from the Ijebu-Ode 2 branch of FCMB to the tune of N2, 554,000.00, with his salary as collateral. And a monthly repayment deduction started in July of the same year.
But, according to documents made available, a top-up of another N2,416,750.84, with a value date of January 1, 2015, was done on his account on January 19, just as a withdrawal of N2, 340,902.36 was made on the same date. Interestingly, he got no form of notification of the transactions, either by electronic mail or text message.
Meanwhile, the documents showed that normal deductions by the bank continued as his salary was paid on a monthly basis.
Also, his loan repayment tenor had been restructured and extended to reflect an end date of 2019. On December 4, 2015, an unsuspecting Adepoju said he applied for and got a statement of his account and discovered that, earlier in January 2015, his account had been credited with the said sum of N2.41 million by way of a top-up loan disbursement and debited almost immediately with N2.34 million.
According to The Point Newspaper, Alarmed by the discovery of the wrongful transaction on his account statement, he wrote a letter of complaint, dated December 14, 2015 to the manager of the FCMB Ijebu-Ode 2 branch, asking for a reversal. But Adepoju alleged that for several months, no action had been taken by the bank till date to investigate the wrongful entry and transaction on his account and right the wrongs.
Another letter was reportedly sent to the Group Managing Director of the bank, which was neither acknowledged nor treated. Shockingly too, the bank had, according to Adepoju’s statement of account, continued to make deductions in line with the phantom loan top-up from his salary account, even up till January 2017.
“It left me with no other option than to conclude that it was a deliberate and well thought-out fraud against me,” he recalled. In a letter from Olatunde OlaDada and Co, Adepoju’s lawyers, titled,“Fraudulent Debit, Charges and Interest in Account No 2122624017, and dated November 9, 2016, FCMB’s attention was drawn to the alleged fraudulent transaction, and a N10m compensation demanded.
The letter read in part: “Our client never got value for the phantom top-up loan amount of N2, 416,750.84 (or of any amount whatsoever). He never withdrew same, never saw it, and never touched it. He knew nothing about it until sometime after December 4, 2015 when he applied for, and got, a statement of his account.
“Based on the foregoing, we have our client’s instructions to demand that:
1) The wrong or fraudulent entry in our client’s account statement showing a phantom loan disbursement of N2,416,750.84 be reversed, with immediate effect.
2) The extension of his Repayment Schedule from 2016 to 2019, consequent upon the phantom topup loan, be reversed to end at 2016, as originally agreed by the parties…
3) That the sum of N10, 000,000.00 be paid to our client as damages for the troubles caused him by your bank in the course of this phantom top-up loan.”
On how a customer’s account could be used to perpetrate such fraud, a banker in the credit departmnent of a first rate commercial bank, who spoke in confidence to our correspondent, explained that, where the control lines were a bit weak, some fraudulent bankers “use the accounts of depositors, who had taken previous loans to divert funds for personal use, while leaving the unsuspecting depositors to suffer the impact of illegal loan repayment charges.”
He added, “But many bank customers may not be able to easily detect this anomaly. In such cases, the alert system is disabled. So the customer never gets to know when his account is credited or debited.
He only gets alerts of interest deductions, which he may disregard as normal deductions, based on his earlier loan. “In this particular case, the customer would not have known because those who committed the fraud internally, programmed the repayment to start after the expiration of the first loan.”
Another customer, Adekanmbi disclose that, on his part, he obtained a N1 million loan from FCMB around June/July 2013, with a tenor of 60 months, which was supposed to end around July 2018.
He said, “I started the repayment on July 25, 2013 at about 23.95 per cent, and the FCMB marketer who came to our office then said it would be a fixed percentage. I then complained that the interest rate was on the high side and now in 2017, it has increased to 26.95 per cent.
“The loan was supposed to end in July 2018, but to my surprise, I am now seeing November 25, 2018 while the payment has increased from the earlier stated amount, with an additional five months and with no form of explanations.”
Investigations are still ongoing as regards fraudulent top-up loans as more customers have begun to bombard our correspondent with calls on shady transactions, which they said they would back with documents.
When contacted, FCMB’s Group Head, Corporate Communications, Mr. Diran Ojo, after getting the details of the cases and allegations from the Ijebu-Ode branch, told our correspondent that the bank had committed no infraction against the customers.
He said that the customers were only abusing their access to the media and trying to blackmail the bank. Ojo said, “I have found out that these two young men work in the public relations department of the Federal University of Agriculture Abeokuta, and because they have access to the media, that is why they have come to you.
But unfortunately, they are now using that access to perpetrate what is wrong. They are trying to blackmail us and we would fight back with everything in our possession. That is what we are going to do with these guys.”
Ojo also read out a mail, which he said was sent to him, from one of his colleague in the Consumer Improvement Department, Mr. Folarin Lewu.
According to the mail, Lewu said that Adepoju was the instigator and that he knew nothing about the other customer. Ojo read, “Adepoju requested for loan restructure, and top-ups subject to confirmation two or more times.
The changes in the exchange rate over the tenor of his loan gave the customer the wrong impression that there was never any loan. We have provided a convincing proof that there was nothing underhanded at least twice in the past two years.
On one occasion, Adepoju Kolawole independently reported to the control staff in Ijebu-Ode 2 branch and mentioned my name. “The control staff engaged him in a conversation for over 30 minutes to get a clear picture, after which he volunteered to explain to Mr. Adepoju.
The matter appeared to be closed thereafter. Adepoju characteristically came back each time that the burden of repayment was biting him, because of his now depleted income. He apparently secured another loan within his organisation that depleted his disposable income further.”
However, Adepoju has challenged the bank to produce documents proving that he requested for a top-up loan, describing the allegation as not only false, but a further proof that some of the banks’ officials were involved in the shady deal.
While our investigation was on, one of the bank’s executives, who claimed to be a staff of FCMB from its regional head office in Ibadan, allegedly reached out to the two customers, asking them to prevail on the newspaper to drop the story and that they would give them redress on the case on or before Monday, February 27.
He specifically told Adepoju that the Branch Manager from Ijebu-Ode 2 would visit him. Interestingly, early on Wednesday, February 22, our correspondent also received several calls from some of the bank’s officials in Lagos, who had earlier claimed that the bank did no wrong, asking her to discontinue the investigation and publication.
Meanwhile, disguising as a lawyer who was investigating some cases of fraud, our correspondent gathered from two competent and highly placed sources at the bank’s head office that similar cases of customers, who had been defrauded by the bank staff, had become rampant in recent times.
The sources, in the belief that they were assisting an old time friend and associate, later gave our correspondent tips on the channels to explore in getting proper redress for the cases being handled.
They, however, noted that such cases, where a top-up loan would be given without the account holder initiating it, had been going on without the knowledge of the management of the bank, adding that with the whistle that had been blown, investigations would definitely fish out the culprits and flush them out of FCMB.
Reacting to the development, a forensic accountant, Mr. Ori Adeyemo, after a thorough perusal of the documents made available by Adepoju, said there was an evidence of account manipulations.
He said, “Merely looking at this account, it is a fraud. The customer was also debited for insurance to the tune of N63, 850 on May 20, 2013. The Central Bank of Nigeria’s revised guide on bank charges of April 1, 2013, said that customer and insurance company should go and negotiate in the area of insurance transaction.
“It is a breach of the law or public policy for which appropriate sanctions are imposed. The bank was charging interest beyond contractual tenor. Having unilaterally terminated the contract; the bank should have stopped charging interest.
“There are different categories of fraud. Some are insider related, while some are to make up the outrageous targets given to them by the banks, which when they cannot balance, they dip their hands into customers’ accounts with all sorts of charges to balance their books.”
Questioning the level of transparency in the banking industry, he said, “When these banks want to steal money, and pass those offensive charges into a customer’s account, there won’t be any alert to that effect.
The only thing you will see is the withdrawal and deposit alert.” Adeyemo, however, noted that he had over 400 cases on fraud related issues that he was prosecuting for customers against various banks.
The Consumer Protection Council had also last year directed the management of FCMB to refund N1.54 billion to the Bauchi State Government, being the amount said to be illegally deducted by the bank from the state’s loan account.
According to the council, the order was made after the conclusion of an investigation into a petition by the state government. The state had claimed that it was short-changed by the FCMB to the tune of N1.86 billion as excess interest and other charges on its loan account with the bank.
The CPC also stated that the state government decided to send the petition to the council, after the CBN had declined further adjudication on the case through a letter dated July 15, 2015.