Court Declares ‘No Refund Policy’ By Service Providers Illegal In Nigeria

High Court in Enugu State has ruled that the “no refund policy” mostly used by service providers in order not to return payments made to them by their customers/clients, is illegal.

Gatekeepers News reports that Justice C.O. Ajah declared the no refund policy 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.

This follows a judgement delivered in Suit No: E/514/2021. The suit was instituted by Patrick C. Chukwuma after Defendant refused to refund his bus fare after failing to convey him to his destination.

According to the plaintiff, he purchased a ticket from the Obollor-Afor branch of Peace Mass Transit Limited to convey him to Enugu on the 10th of February, 2021. However, after two hours delay occasioned by the absence of passengers, Plaintiff returned to the ticketing office and asked for a refund of the N500 he paid as the transportation fare. The 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 travelling back to Enugu. A letter was written by the lawyer to Peace Mass Group of companies demanding an apology and a refund was neglected, which prompted 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 was 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 transactions 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

Justice C. O. Ajah of the High Court of Justice in his judgment delivered on Thursday, 7 April 2022, promptly dismissed the objections of Defendant and upheld the arguments of Plaintiff.

The 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 Defendant to refund the Plaintiff the money paid for the transportation fee from Obollor-Afor to Enugu on 10/2/2021 is unlawful.

The court further ordered Defendant to pay the sum of N500,000 as damages to Plaintiff.