Joweria Nakku, a resident of Kyebando, a Kampala suburb has initiated legal action against Stanbic Bank Uganda Limited, accusing the bank of failing to safeguard her savings account, which resulted in the fraudulent withdrawal of Shs 68 million.

The lawsuit, filed in the Commercial Division of the High Court of Uganda, details Nakku’s claims that between February 7th and 8th, 2023, unauthorized transactions amounting to Shs 68 million were conducted from her account through the Flexi Pay platform — a service she insists she never registered for. These transactions were reportedly executed using four unknown Airtel lines.

Represented by Kimanje Nsibambi Advocates, Nakku argues that Stanbic Bank’s negligence allowed fraudsters to access her account undetected. The legal team highlights that 28 transactions were made within 24 hours, surpassing the account’s transaction limit. They contend that the bank failed to exercise reasonable care to detect and prevent the suspicious transactions.

The lawsuit raises significant concerns about the effectiveness of Stanbic Bank’s authentication protocols and transaction monitoring systems, particularly regarding the Flexi Pay service. Nakku’s lawyers assert that the bank’s inability to protect her account amounts to a breach of duty, making the institution liable for the total losses incurred.

In a proposed settlement, Stanbic Bank offered Nakku Shs 34 million, citing the long-standing relationship between the parties and describing the payment as a good faith gesture intended to fully settle all related claims.

The settlement statement read, “In consideration of the Second Party’s good and long-standing relationship with the First Party, the First Party shall make a good faith payment to the Second Party of UGX 34,000,000…which figure shall be in full and final settlement of all claims related to or arising out of the subject matter.”

However, Nakku has rejected this offer, arguing through her legal team that it fails to adequately compensate for her losses.

Her lawyers maintain that the bank’s negligence and failure to secure her account warrant compensation for the entire amount fraudulently withdrawn.

The case is scheduled for hearing on June 24th, 2024, at 9:40 am in the Commercial Division of the High Court of Uganda. The outcome of this case could have significant implications for customer trust and the operational practices of financial institutions in Uganda.