Nigerian Court Rules Against Common Business Policy Of “No Refund-Money-After-Payment”

*Orders Peace Mass Transit to Pay N500,000 in Damages For Refusal To Refund Lawyer For Abandoned Journey

A High Court in Enugu State has set aside the “no refund policy” commonly used by service providers to prevent returning payments made to them by their clients/users.

The Court through Hon. Justice C.O. Ajah declared the no refund policy as illegal, null and void in light of the provisions of Sections 120, 104, 129 (1) (a) and (b) (iii) of the Federal Competition and Consumer Protection Act, 2018.

The judgement which was delivered in Suit No: E/514/2021 was instituted by the Plaintiff, Patrick C. Chukwuma after the Defendant refused to refund his bus fare after failing to convey him to his destination.

The incident that led to the suit occurred on the 10th of February, 2021 when the Plaintiff purchased a ticket from the Obollor-Afor branch of Peace Mass Transit Limited to convey him to Enugu. Following a two hours delay occasioned by the absence of passengers, the Plaintiff returned to the ticketing office and asked for a refund of the #500 he paid as the transportation fare.

Staff of the Defendant however refused to refund the money, insisting that their company policy was that money paid for transport fare cannot be returned to the passenger and citing the statement written on their ticket to that effect as conclusive proof of their position.

When the Plaintiff tried to explain to them that their policy was unlawful, as the law mandates them to refund fares for services that have not been provided they retorted in a rude manner, prompting the learned counsel to leave their park and seek alternative means of traveling back to Enugu.

A letter written by the lawyer to Peace Mass Group of companies demanding and apology and refund was neglected prompting the lawyers law firm to institute the action.

In the action, the Plaintiff asked the court to determine a sole question which was “whether the Defendant’s policy of “no refund of money after payment” is in violation of Section 120 of the Federal Competition and Consumer Protection Act 2018 especially when the contractual obligation to convey the Plaintiff to his preferred location was terminated”.

The Plaintiff represented by his lawyers led by Barr. Tochukwu Odo amongst other grounds argued that the Federal Competition and Consumer Protection Act 2018 is the primary law on questions of consumer transaction in Nigeria and that by virtue of section 120 of the law, the consumer has a right to cancel any advance booking, reservation or order for any goods or services subject only to the deduction of a reasonable charge by the service provider.

The Defendant through their counsel Barr Titus Odo raised technical arguments on the jurisdiction of the court and mode of commencement of the suit.Hon. Justice C. O. Ajah of the High Court of Justice in his judgment delivered on 7 April 2022, promptly dismissed the objections of the Defendant and upheld the arguments of the Plaintiff.

The Hon. Judge after a thorough analysis of the provisions of the Federal Competition and Consumer Protection Act 2018 vis a vis the conduct of the parties in the case decided that indeed the policy of no refund of money after payment is illegal, null and void in light of the provisions of Sections 120, 104, 129(1)(a) and (b) (iii) of the Federal Competition and Consumer Protection Act 2018.

The court thereafter made a declaration that the refusal of the Defendant to refund the Plaintiff the money paid for the transportation fee from Obollor-Afor to Enugu on 10/2/2021 is unlawful