By Temi Salako
Millions of Nigerians lose money every day when they try to use bank USSD codes for transfers, balance checks, or payments. The moment they dial the code, telcos deduct a N6.98 fee from their airtime. If the network drops or the session fails, which happens often because of poor telco coverage, the customer gets nothing but still loses the fee. Banks and telcos collect the money while customers bear the full loss. This practice amounts to charging people for a service that never arrives.
The Federal Competition and Consumer Protection Commission has taken notice. In October 2024 the FCCPC warned banks directly that ongoing disruptions in online and USSD banking services violate consumers’ rights under the Federal Competition and Consumer Protection Act 2018. The law guarantees every Nigerian the right to quality service and reasonable access to goods and services. When banks and their telco partners cannot deliver reliable access to funds or transactions, they fall short of this legal standard. The FCCPC continues to review these failures and has made clear that consumers deserve redress.
A Federal High Court ruling in April 2026 strengthened the FCCPC’s hand. The court dismissed a challenge by one of the banks and confirmed that the Commission has full authority to investigate and act on consumer complaints against banks. The court even imposed a N2 million fine on the bank for bringing what it called a frivolous case. This decision removes any doubt: banks answer to the rule of law and cannot hide behind technical excuses when customers suffer.
The numbers tell a painful story. Since June 2025, when the end-user billing system began, telcos started deducting the N6.98 USSD fee straight from airtime instead of billing banks. Customers report repeated failures during network outages. They dial once, pay the fee, receive an error message, dial again, and pay again. Reports speak of billions of naira extracted this way with no service delivered. Banking already tops the FCCPC’s list of consumer complaints, with thousands of cases involving unauthorized deductions, failed transactions, and poor redress.
Nigerians want simple fairness. They expect to pay only when the bank actually completes the transfer or shows the balance. They demand prompt refunds when network problems, which lie outside their control, block the service. They insist that regulators enforce the “no service, no charge” principle that exists in other countries. The current model forces ordinary people, including teachers, traders, and students who rely on cheap USSD because they cannot afford smartphones or data, to subsidize infrastructure failures by banks and telcos.
Is this system feasible or sustainable? No. It destroys trust in digital banking at a time when Nigeria pushes for a cashless economy. Customers abandon USSD after repeated losses and turn to costlier options or simply keep cash at home. This slows economic activity, hurts small businesses that depend on quick transfers, and damages the reputation of the entire financial sector. Banks and telcos cannot keep shifting the cost of their own weak networks and unresolved technical debts onto the public without consequences. A sustainable model requires them to charge only on successful transactions and invest seriously in reliable infrastructure, including better network coverage and backup systems.
The evidence shows banks act like sharks in this arrangement. They settled their long-running debt dispute with telcos by agreeing to pass the full cost to customers through airtime deductions. Yet they share no risk when the network fails. Telcos deduct the fee upfront regardless of outcome. Both sides profit while the customer stands helpless. This is not partnership or innovation. It is a business model built on extracting money for services not rendered.
The rule of law offers a clear path forward. The FCCPC must continue its investigations and impose meaningful penalties on repeat offenders. The Central Bank of Nigeria and the Nigerian Communications Commission should align their rules so that USSD fees apply only upon confirmed successful transactions. Regulators already require reversals for many failed electronic payments within 24 to 72 hours. They must extend the same strict timelines and automatic refunds to USSD sessions affected by network downtime.
Nigerians have shown patience with poor service for too long. They now demand accountability. Banks and telcos must fix their networks, refund lost fees, and stop treating customers as the solution to their operational problems. The FCCPC has the mandate and the recent court victory to make this right. Failure to act will only deepen public anger and stall the growth of inclusive digital finance that Nigeria claims to want.
Customers who lose money on failed USSD transactions should document the errors, keep their airtime receipts, and report them immediately to their bank, the telco, and the FCCPC. Collective pressure through formal complaints remains the strongest tool ordinary Nigerians have to force change. The days of paying for nothing must end.