Banks can demand customers’ social media handles, court rules

Banks can demand customers’ social media handles, court rules
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 A federal high court in Lagos has struck out a case against
the Central Bank of Nigeria (CBN) over its directive requiring banks to collect
and verify social media handles as part of their know-your-customer (KYC)
requirement.

 

In June 2023, the apex bank issued the directive, saying the
aim is to prevent financial crime, and terrorism, as well as boost the
precision and thoroughness of customer identification.

 

The applicant, Chris Eke, a customer, represented by
Olubunmi Abayomi-Olukunle, a lawyer, had filed suit number FHC/L/CS/1281/2023
in July 2023, arguing the CBN’s directive infringed upon constitutional rights,
particularly section 37 of the 1999 constitution.

 

Nnamdi Dimgba, the presiding judge, struck out the suit
filed by Eke, which sought a declaration that the regulation as contained in
section 6(a)(iv) of the CBN (customer due diligence) Regulations, 2023, is
“undemocratic, unconstitutional, null and void”.

 

The CBN, in its response to the suit, filed a notice of
preliminary objection, challenging the competence of the suit and disagreeing
with the claim of interference with the applicant’s private life.

 

In his judgment, Dimgba held that the notice of preliminary
objection had merit, subsequently striking out the suit.

 

The judge ruled that providing a social media handle is
equivalent to providing email and phone numbers for potential customers, and
therefore, it does not violate the right to privacy.

 

 “First, the applicant
claims that the requirements on the CBN regulations for financial institutions
to request and collect the social media handle of its customers as part of KYC
infringes on his right to privacy,” the judge said.

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“This claim is very ambitious and amounts to a very far
throw. The said regulations are directed to and apply to financial
institutions.  It does not apply to
private individuals such as the applicant.

 

“Even if, as appears to be argued, that the regulations
itself would inevitably affect the applicant, this claim is speculative for the
simple reason that in nowhere in the affidavit in support was it stated that
the applicant operates an account with a financial institution and that the
said institution had demanded his social media handle.”

 

Consequently, the judge said the suggestion that he would be
negatively affected by the regulation is very “speculative and at large”.

 

He said there is a lack of evidence suggesting financial
institutions have implemented the regulation, and it is causing disruptions and
inconvenience.

 

Furthermore, Dimgba said if the applicant is “irritated by
the requirement of the regulation”, he has a choice to “refuse to do business
with any bank insisting on the information as part of its social media handle,
but to seek other alternatives”.

 

‘PROVISION OF SOCIAL
MEDIA HANDLES TO BANKS DO NOT TRANSLATE TO BREACH’

 

Dimgba said banks asking customers or potential clients to
provide their social media handles is not a breach of privacy.

 

He said the essence of having a social media account was for
one to be publicly visible communication-wise.

 

According to the judge, a social media handle, being in the
public space, can be accessed by everyone whether or not consent was obtained.

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As a result, he said it would be unreasonable to hold the
respondent in breach of privacy.

 

“The apprehension of the Applicant of his social
interactions being monitored is manifestly speculative in itself and rather
incredulous to believe that the financial institutions have the luxury of time
to concern itself with such frivolities,” the judge said.

 

Striking out the suit, the judge made no order regarding
costs.

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