On April 10, 2025, a Nigerian entrepreneur took to X to share a troubling experience. His accounts with Opay and Kuda had been frozen, allegedly due to a ₦9.3 billion fraud case involving Union Bank; a case not in the news as of April 13, 2025.
He claimed that the funds he received were legitimate payments for services rendered. Despite his protests, he was ensnared in a legal quagmire, unable to access his funds and facing reputational damage.
“A total of ₦340,000 was sent to my Opay account, and they froze my Opay account…that they suspect would be fraud money. I am a businessman. I do legitimate business.“
@dreamchaserjkt had said in an earlier post:
“This one is for my Nigerian fans and followers. Convert all your money from naira to usdt first especially those that use Opay and Kuda. I will update you guys the reason I said.”
This incident raises critical questions about the balance between law enforcement and individual rights in Nigeria’s financial system. How do existing laws govern the freezing of bank accounts?
Are financial institutions acting within their legal bounds? And what recourse do innocent individuals have when caught in the crossfire?
Nigeria’s legal system provides mechanisms for freezing bank accounts suspected of involvement in financial crimes.
The Economic and Financial Crimes Commission (EFCC) Act of 2004, specifically Section 34(1), empowers the EFCC to apply to a court ex parte for an order to freeze such accounts. This process ensures that a neutral judicial body reviews the evidence before any action is taken, safeguarding individual rights.
Similarly, the Money Laundering (Prohibition) Act of 2011 in Section 17 allows the EFCC to place a temporary stop order on transactions for up to 72 hours without a court order. However, to extend this freeze, the EFCC must obtain judicial authorisation.
These provisions aim to strike a balance between effective law enforcement and the protection of individual liberties.
Courts have consistently upheld the necessity of judicial oversight in freezing accounts. In Guaranty Trust Bank v. Adedamola (2019), the Court of Appeal emphasised that banks must ensure a court order is in place before restricting a customer’s account.
Acting otherwise constitutes a violation of the customer’s rights.
The Court of Appeal held as follows:
“The above provisions are in accord with the decision of the lower court. The Economic and Financial Crimes Commission has no powers to give direct instructions to a bank to freeze the Account of a Customer, without an order of court, so doing constitutes a flagrant disregard and violation of the rights of a Customer. I must add that the judiciary has the onerous duty of preserving and protecting the rule of law; the principles of the rule of law are that both the governor and the governed are subject to the rule of law. The Courts must rise to the occasion, speak and frown against the arrogant display of powers by an arm of government. It is in the interest of both government and citizens that laws are respected, as respect for the rule of law promotes order, peace and decency in all societies, we are not an exception. Our Financial institutions must not be complacent and appear toothless in the face of brazen and reckless violence to the rights of their customers. Whenever there is a specific provision regulating the procedure of doing a particular act, the procedure must be followed. Per Abubakar JCA.“
‘Opay froze the account with a warning?’
In this entrepreneur’s case, while OPay reportedly acted under a court order (indicating legal compliance), the entrepreneur’s experience highlights a critical gap: no prior notification before the account restriction. This raises two key concerns:
- Operational transparency: Customers were unaware of pending legal actions affecting their accounts.
- Due process violations: Freezing funds without warning denies users the opportunity to seek legal redress or make necessary financial adjustments.
For the second point, Nigerian law provides several protections that implicitly or explicitly support the argument that freezing funds without prior notice or opportunity to contest violates due process rights. Here are the key legal frameworks:
1. Constitutional guarantees: Right to Fair Hearing (Section 36, 1999 Constitution)
– Section 36(1) states:
“A person shall be entitled to a fair hearing within a reasonable time by a court or other tribunal established by law.”
– Relevance:
– Freezing accounts without notice denies customers the chance to be heard or challenge the action, violating this constitutional right.
– Courts have ruled that even administrative actions affecting property rights must comply with fair hearing principles.
2. Central Bank of Nigeria (CBN) Guidelines
– CBN KYC/AML/CFT Regulations (2023):
– Section 13.2.c requires financial institutions to conduct CDD in the case of a “material change” to their accounts, including restrictions.
3. Section 44(1), 1999 Constitution: Right to Property
– Guarantees that no person shall be deprived of their property without compensation or due process.
– Implication: Freezing funds without notice or recourse amounts to a temporary deprivation of property rights.
Key exception: National Security & Terrorism Financing: The Terrorism (Prevention) Act 2013 allows immediate freezes without notice for suspected terrorism financing. However, this exception is narrowly applied and doesn’t cover routine commercial disputes.
A call for balanced governance
OPay’s case underscores a wider tension: regulatory compliance must not come at the cost of user trust. By adopting proactive notification systems and clearer communication, fintech entities can uphold both legal and ethical standards, turning a reputational risk into a competitive advantage.
“A court order may authorise a freeze, but common sense—and customer loyalty—demand a warning.”
The user, in a post on April 11, says his account has been unfrozen, suggesting that his posts may have caused Opay’s quick response.
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