Judge rules in favor of investor, ordering Utmost Wealth Solutions to repay $16,889 due to "deceptive" contract terms

The High Court of Lagos State has ruled in favor of Mrs. Clara Chinenye Nwachukwu, ordering Utmost Wealth Solutions to refund $16,889.75, after deeming a key clause in its investment policy "manifestly unjust, unfair and one-sided."

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Justice K. A. Jose (Mrs.) delivered the judgment on January 26, 2026, stating that the policy term allowing the company to apply 100 per cent of a customer's premium payments to administrative charges was inequitable and contrary to consumer protection laws.

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Mrs. Nwachukwu had filed suit LD/9332GCMW/2022 against Profinad Nigeria Limited, Utmost Wealth Solutions, and Ms. Nnite Chinwe Ogochukwu, seeking a declaration that the clause was invalid and a refund of $18,000 invested under the "Vision Plan", along with accrued interest of $2,106.84, N10 million in general damages, and costs.

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The dispute arose when Mrs. Nwachukwu was introduced to a long-term savings and investment policy by Profinad Nigeria Limited in August 2014, which she subscribed to and paid $1,000 monthly premiums for 18 months until February 15, 2016.

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A valuation statement dated June 8, 2016, showed her plan had grown to $20,106.84, comprising her $18,000 capital and $2,106.84 in accrued interest, but when she requested withdrawal in March 2022, she was told the policy had lapsed in 2019 with no value.

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Profinad had written to the Canadian High Commission in June 2021, confirming Mrs. Nwachukwu's investment account with Utmost Wealth Solutions, which reinforced her belief that the investment remained intact and operational.

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The second defendant relied on Clause 5.3 of the policy's terms, which stated that 100 per cent of premium payments during the initial period would be used to fund administrative charges for the duration of the policy.

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Mrs. Nwachukwu argued that she was never properly informed that her entire contributions for nearly two years would be consumed by fees, and she understood the investment to function like a pension scheme, believing she could withdraw her funds at any time while retaining value.

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The court examined the clause under Section 127 of the Federal Competition and Consumer Protection Act, which prohibits unfair or excessively one-sided contractual terms, and Justice Jose held that courts are empowered to invalidate terms that are inequitable under consumer protection law.

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The judge found that retaining 100 per cent of the invested sum and accrued interest, even after the policyholder ceased participation, was excessively one-sided, and the court dismissed the claims against Profinad Nigeria Limited and its managing director.

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The court ruled that although the clause was invalid, the insurer was entitled to reasonable administrative fees for the period it actually managed the policy, calculating allowable fees at $3,217.09 and ordering a refund of $16,889.75.

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The court declined the N10 million general damages claim, holding that contractual damages are limited to foreseeable losses, but awarded N2 million in costs in favor of the claimant.

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The ruling is expected to have wider implications for long-term investment products in Nigeria, particularly those with front-loaded fee structures that may erode investors' capital in the early years of subscription.