In recent times, Nigerian banks have been advertising the advantages associated with the use of Automated Teller Machines (ATMs) for sundry banking transactions, especially withdrawals. These ATMs have sprung up wherever there is a bank and in other strategic locations. The banks cajole their customers to apply for the ATM cards. In some banks, there are notices that customers will pay charges if they make over-the-counter withdrawals of moneys below a specified amount, thus compelling people to use the ATMs. What I do not know is whether the issuance of the ATM card by banks attracts any charge. I have a feeling it does, just as the issuance of a cheque or withdrawal booklet does. According to the banks, the use of ATMs by Nigerians will almost equate us with the citizens of advanced countries which operate a cashless (card) economy. The use of the ATMs, we are told, reduces the incidence of theft which is mostly the bane of persons carrying cash on transit. But this does not eliminate the chances of a robbery attack at the site of the ATM or soon after one may have made a withdrawal therefrom.

The use of ATMs, no doubt, spares one the horror of joining the long queues which are the hallmarks of some Nigerian banks. I went to a bank once around 8am to make withdrawal and succeeded in doing so around 3pm the same day! But with ATMs, one can make withdrawals after banking (office) hours, during weekends and public holidays. A person who has an ATM card and sufficient credit balance in his account would not be anxious to make withdrawal from a bank on a Friday or on a day preceding a public holiday. It is not disputed that the use of ATMs is mutually beneficial to the bank and its customer. The bank is saved the inconvenience of an overcrowded banking hall and overstretched paying cashiers. However, among the snags here are the recurring system breakdowns and inability of ATMs to dispense money which users of ATMs often experience.

Again, an email I received from a London-based friend shows that criminals now plant gadgets which can snap one’s secret number or trap the card during usage of the ATM. In the first case, the rogue will aim at stealing one’s card, having obtained the secret number through his gadget. In the case of a trapped card, the criminal will hang around and offer to help the distressed card-owner retrieve the card. He will ask for the secret number, make bogus attempts at retrieval, and when the card-owner leaves frustrated, he will retrieve the card and clear all the credit in the account. I have not heard of the occurrence of any of such incidences in Nigeria; however, the possibility calls for vigilance on the part of banks and their customers who patronize ATMs. Routine checks should be run on these ATMs for any strange gadgets, while bank customers should be mindful of the time they use the machines and report any complaints thereof to the banks only. Added to these is the necessity for banks to station security men at the site of ATMs on a permanent basis. At present, Nigeria appears unripe for unsecured ATMs.

I now go to the main issue in this write-up. Few years ago, my younger sister opened a savings account with one of the Nigerian new generation banks, at a branch near the University of Nigeria Nsukka. While opening the account, she wrote down my mobile number for contact as she had none then. Ever since, once any transaction occurs on that account, the bank sends a text message to my mobile phone. I will not name the bank, but there are two particular text messages from it which worry me. One of them reads: “Pls use our ATMs as often as u wish coz we have improved our services to serve u better. Every ATM withdrawal is free except the N100 monthly charge. Stay Happy”. What a paradoxical statement! The other text message reads: “Debit Alert! NGN100.00 was debited from your Acct No … on 31–10–2007 … Detail: October 2007 ATM Service Charge”. These text messages suggest that the N100 monthly charge is imposed regardless of the usage or otherwise of the ATM by the customer. I am aware that, currently in Nigeria, the use of an ATM card on the machine of the issuing bank is supposedly free, while every single use on another bank’s machine attracts a flat charge of N100.

My main concern in this piece is the propriety or otherwise of a bank charging its customer(s) for the use of its ATM cards on machines owned and managed by it. Granted that a customer who uses the ATM does himself some good, but it does not justify his extortion by the bank. If a bank charges a customer for the issuance of an ATM card, as is the case with cheque or withdrawal booklets, I do not see any justification for any other periodic charge on the same customer for using the same card, except when used on another bank’s ATM for withdrawal. For a current account, is such a periodic charge not in addition to the usual Commission-On-Transaction (COT) for which bank customers are debited in respect of deposits and withdrawals? If it is, then it is unconscionable, as it amounts to a sort of double jeopardy for the customer. In a savings account, as in my sister’s case, such a charge is hard to swallow. It amounts to getting through the backdoor what is not permissible conventionally in savings account. And it is tantamount to extortion of a hapless customer.

My query is: whether the Central Bank of Nigeria is aware of and approves of these charges imposed by some banks for the use of their ATM cards for transactions on ATMs owned and managed by them? If the answer is in the negative, I urge the CBN to investigate the matter, to know whether it is in addition to the charge for the issuance of the cards and the traditional COTs (in respect of a current account). The banks involved in this should be fished out and warned to desist therefrom. Additionally, the guilty bank(s) should be directed to refund any such deductions or charges to the affected customers.

An ancillary sore point is the flat charge of N100 imposed for the use of one bank’s card on another’s ATM, including minor transactions like account balance inquiry. The imposition of a flat charge for every use of one bank’s card on another’s ATM is as condemnable as the monthly charge of N100 a bank extorts from its customers for using its card on an ATM owned and managed by it. A transaction such as withdrawal should not attract the same charge as an account balance inquiry even when both are made by using one bank’s card on another’s ATM. Contrarily, one does not quarrel with the N100 charge for using one bank’s ATM card on another bank’s machine for withdrawal. It is comparable to paying one bank’s cheque into an account with another bank and, is bound to attract some charges.

Nonetheless, many Nigerian banks, in an unchecked manner, subject their customers to untold and unfathomable charges. These charges in reality are by far higher than what is touted by the banks and are duplicated under different names. It is time the Central Bank of Nigeria (CBN) took a deeper and sterner look in this area to curb the ugly trend and protect the innocent but unfortunate customer.

Ikechukwu A. Ogu

Legal Practitioner

Central Business District, Abuja.

Email: ikechukwuogu@yahoo.com

Robot  # 1 | 13.08.2008 22:16

...Read the full article.

10Kobo  # 2 | 13.08.2008 23:57

=Robot;4295083293> These text messages suggest that the N100 monthly charge is imposed regardless of the usage or otherwise of the ATM by the customer. I am aware that, currently in Nigeria, the use of an ATM card on the machine of the issuing bank is supposedly free, while every single use on another bank’s machine attracts a flat charge of N100. You know, as per Naija, they must exploit their fellow citizens to the fullest. Did you forget to mention that each time they send those unsolicited text, gbaam, they debit you =N=8?.....after telling them l dont want text since l am mostly not around rather, they should send E-mail! In my own case, my bank (G*B*nk) will ensure that most of the time, its ATM either has "no-cash" or is faulty! So, no option, l have to do my withdrawal, not by choice, but by force, from another bank's machine and you know what....=N=100 flat. :D ..smart dudes:D:D At a time, they even debited me for =N=1000.....for ATM card replacement, meanwhile, that was the first time l was even requesting for the Card, talk less of loosing it! I have offshore accounts but all they charge me is a "govt approved quarterly fee" which is so minimal, l dont even remember they charge me. I can use my card on other banks ATM, at no cost but l can not print my statement there-of. But the same statement, l can log-on the banks website and print for at least three months and they will send same hard copy statement, every quarter (try selecting the "statement period" in my Naija bank website, greater than one month) an it will just hang there, unresponsive :eek: And all these on top of =N=5/Mil COT (payment or withdrawals!), 15% VAT on such COT amount (double taxation?) and some outrageous amount when you do online transfer between two accounts within the same bank!! For God's sake, why are we so exploitative and wicked to ourselves? But who will bell the Cat? CBN? or their conscience? Is this how to "make profit" or declare "wonderful EOY results? Just by ripping-off the same customers you portend to serve? What extra, does it cost a bank when a customer uses its ATM, apart from the initial set-up cost? Very minimal..but the advantages to the bank and the customers are many. While the civilized world uses technology to leverage business and deliver better services and insignificant cost, my dear people uses it as an opportunity for extortion! What a morally depraved generation, in need of a complete and total re-orientation? I weak O! 10Kobo

FoxCatcher  # 3 | 14.08.2008 07:59

=10Kobo;4295083303>You know, as per Naija, they must exploit their fellow citizens to the fullest. Did you forget to mention that each time they send those unsolicited text, gbaam, they debit you =N=8?.....after telling them l dont want text since l am mostly not around rather, they should send E-mail! In my own case, my bank (G*B*nk) will ensure that most of the time, its ATM either has "no-cash" or is faulty! So, no option, l have to do my withdrawal, not by choice, but by force, from another bank's machine and you know what....=N=100 flat. :D ..smart dudes:D:D At a time, they even debited me for =N=1000.....for ATM card replacement, meanwhile, that was the first time l was even requesting for the Card, talk less of loosing it! I have offshore accounts but all they charge me is a "govt approved quarterly fee" which is so minimal, l dont even remember they charge me. I can use my card on other banks ATM, at no cost but l can not print my statement there-of. But the same statement, l can log-on the banks website and print for at least three months and they will send same hard copy statement, every quarter (try selecting the "statement period" in my Naija bank website, greater than one month) an it will just hang there, unresponsive :eek: And all these on top of =N=5/Mil COT (payment or withdrawals!), 15% VAT on such COT amount (double taxation?) and some outrageous amount when you do online transfer between two accounts within the same bank!! For God's sake, why are we so exploitative and wicked to ourselves? But who will bell the Cat? CBN? or their conscience? Is this how to "make profit" or declare "wonderful EOY results? Just by ripping-off the same customers you portend to serve? What extra, does it cost a bank when a customer uses its ATM, apart from the initial set-up cost? Very minimal..but the advantages to the bank and the customers are many. While the civilized world uses technology to leverage business and deliver better services and insignificant cost, my dear people uses it as an opportunity for extortion! What a morally depraved generation, in need of a complete and total re-orientation? I weak O! 10Kobo @10 kobo, Gbam. Gbam. As usual you said it all. I was just doing some checks on our bank practices penultimate to an article on their 'voodoo' banking practices when I stumbled on this write up. It beautifully encapsulates an aspect of the CBN condoned 'frauds' being perpetuated on Nigerians by our banking sector. Again thanks for that thot provoking comment on a very relevant article. The corruption is definitely not limited to our Public Sector. This should enlighten us on how our politicians find it so easy to steal and stash away so many billions... Ciao

salstep  # 4 | 14.08.2008 08:13

Bank charges!!! how i hate them. Nigeria have taken them to a new level. I recently made 3 payments into my bank account in a different state. All sort of funny charges appeared on my statement amounting to a 5 figure sum. When i queried it, i was told I there is an out of state charge. Same bank, different branch. Avoid UBA if u can.

nijalaw  # 5 | 14.08.2008 19:42

=>...Read the full article. The issuance of an ATM attracts a charge of NGN 1,000.00 & cajole is an understatement. Customers do not know their rights as no bank has the right to charge you for over the counter withdrawals if you do not want to use the ATM. The question is who will bell the cat? =>..My main concern in this piece is the propriety or otherwise of a bank charging its customer(s) for the use of its ATM cards on machines owned and managed by it. Intercontinental bank charges NGN 50.00 for every withdrawal done by their own customers on it's ATM machines. This is criminal. These banks are just criminal & the CBN just turns a blind eye & in fact collude with them to rip us off.

bobokite  # 6 | 14.08.2008 20:41

Again, Another product of a failed state.

Dapxin  # 7 | 15.08.2008 20:49

We go take the idea. We go dabaru the idea. We go dabaru everybody. Announcements go start to happen.... Engineer Bank Manager. Foreign Currency scandal.... Add am togeda give me the answer - thief thief arrangement !

dan kano  # 8 | 16.08.2008 07:32

Can't this issue be reported to the consumer protection council? It is pure exploitation. Intercontinental bank's main branch in Kano has a very rude warning on all counters and doors notifying customers that N150 will be charged for withdrawals less than N100,000 made over the counter. Yet they limit the amount you can draw on their ATM to N20000 and charge N50/N20k withdrawal. i.e if you were to withdraw N100K you will be charged N250. This is really unethical and the regulatory bodies should do something about it.

lionking  # 9 | 17.08.2008 10:05

I've never heard of Diamond, GTB, FCMB, Oceanic or Zenith charging for use of their own ATM. There is a N100 flat fee for using another bank's ATM.

anonimi  # 10 | 17.08.2008 10:33

I think it will be useful for some young accountants and lawyers to team up, study the CBN regulations and offer excessive fee/charges recovery services to clients, starting with companies to make their effort worthwhile. Hopefully the transgressing banks will not armtwist the guys to the detriment of their clients. That is the way to force compliance and real change since Soludo is busy covering up his AFC mess to bother about stringent oversight functions.

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