The Court of Appeal has ruled against the United Bank for Africa (UBA), holding the financial institution vicariously liable for a fraud perpetrated by its employee against a customer in a disputed ₦71.6 million investment transaction.
The appellate court affirmed that banks bear legal responsibility when rogue staff members exploit their official positions and bank infrastructure to defraud unsuspecting customers.
Key Highlights of the Judgment:
- Vicarious Liability: The court held that since the employee acted within the apparent scope of their employment while handling the bank customer’s funds, the institution must bear the consequences of the breach of trust.
- Restitution Ordered: The judgment mandated the bank to refund the principal sum alongside appropriate legal damages to the aggrieved customer who lost funds in the botched investment scheme.
- Precedent on Banking Integrity: Legal analysts noted that the ruling serves as a strong warning to financial institutions to tighten internal controls and monitor staff activities to safeguard customer deposits.
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