MTN’s Momo service experiences security breach, loses N22.3bn

MTN Nigeria subsidiary, Momo Payment Service Bank Limited lost N22.3 billion following a security breach on the fintech’s system, which forced the company to shutdown operation temporarily.

The incident occurred on May 24, 2022, after Momo PSB processed 700,000 transactions, sending proceeds into about 8,000 third party accounts domiciled in 18 banks. Efforts to retrieve the fund has now resulted to the firm filing a lawsuit six days after, with the financial institutions as defendants.

In the suit marked FHC/L/CS/960/2022, it was gathered that the N22.3 billion were transferred to Zenith Bank, Guaranty Trust Bank, First Bank, Access Bank, Union Bank, Wema Bank, Sterling Bank, and Polaris Bank.

Also listed are Ecobank, Stanbic IBTC, Providus Bank, Unity Bank, Unitex Bank for Africa (UBA), Fidelity Bank, Standard Chartered, First City Monument Bank, Suntrust Bank, and Heritage Bank,
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Momo PSB requested for reversal of the funds from the accounts, and details of the customers, in case part of the funds have been transferred to another bank, however, the commercial banks demanded for a court order directing them to provide the information requested by MTN’s subsidiary, hence, the suit.

The payment company requested the court to state that the money sent to the 8,000 accounts in 18 Nigerian banks belong to Momo PSB, and not the customer that received the funds.

The court filings read, “A declaration that the deposits of an aggregate sum of N22,300,000,000.00 erroneously transferred by the plaintiff to the accounts of the customers of the defendant banks, having been done in error, belongs to the plaintiff and not the customers of the defendant banks.

Read also: MOBILE FINANCIAL SERVICES: Airtel Africa partners MasterCard to rival MTN’s Momo

“An order directing the defendant banks to each, individually, account for the sums available in their customers’ accounts and the sums which have been removed by the customers and are no longer available.

“An order directing the defendants’ banks to immediately return the aggregate sum of N22,300,000,000.00, less those funds that are no longer available, to the plaintiffs’ settlement account in the name MOMO PSB settlement account number: 2041379385 at First Bank Plc Samuel Asabia House 35 Marina, Lagos, from where the funds originated.

“An order directing the defendant banks to release all information, including account name information in respect of the accounts from which the plaintiff’s funds have been transferred to third parties, including the destination accounts and the banks in which they are held to assist in the tracing and recovery of those funds.” the company told the court.

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