In recent news, HabariPay, the fintech arm of Guaranty Trust, is in the process of reclaiming ₦1.1 billion (*$1.1 million) mistakenly sent to multiple account holders in 2023. A federal high court in Lagos has granted permission for over 40 financial institutions to freeze accounts that received the funds in question.
The error occurred when the fintech inadvertently double-credited merchants. To lift the account restrictions, affected merchants will be contacted to return the excess funds they received. Additionally, any other accounts that benefited from the double credit will also be required to refund the extra money, as per court documents.
Reports suggest that hackers may have exploited the fintech’s website using a technique known as race conditioning to carry out simultaneous transactions. While some individuals associated with GTCO attribute the incident to human error, HabariPay had initially attempted to recover the funds by directly engaging with merchants before resorting to legal action for cases where independent contact was unsuccessful.
Legal orders are essential for financial institutions to rectify erroneous transactions, as they lack the authority to do so independently. The delay in initiating legal proceedings highlights the challenges faced by Nigerian financial institutions in swiftly recovering lost funds.
This incident underscores broader concerns within Nigeria’s financial sector, as data shows a significant increase in fraud cases, with institutions losing $25.7 million in the second quarter of 2024, a substantial jump from the previous quarter.