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KYC: CBN can collect customers’ social media handles, court rules

Dr. Olayemo Cardoso, Governor of CBN Photo Collage: MouthpieceNGR

*Justice Nnamdi Dimgba of the Federal High Court, in Lagos, rules the Central Bank of Nigeria is constitutionally empowered to demand and collect the social media handles of their clients as part of the standard Know-Your-Customer procedure, declaring it is ‘highly unreasonable to hold the Respondent (CBN) in breach of privacy for what other persons can access

Isola Moses | ConsumerConnect

Justice Nnamdi Dimgba of the Federal High Court, in Lagos, has ruled that the Central Bank of Nigeria (CBN) is constitutionally empowered to demand and collect the social media handles of their clients as part of the standard Know-Your-Customer (KYC) procedure.

ConsumerConnect reports Justice Dimgba Friday, May 17, 2024, held that CBN’s doing so is not a breach of the consumer’s right to privacy.

The Judge made the declaration while ruling on a suit filed by a Lagos-based lawyer, Chris Eke, seeking an order stopping the country’s banking sector regulator from demanding bank customers’ social media handles.

Earlier, Eke was reported to have prayed the court of competent jurisdiction to declare that the regulation as contained in Section 6(a)(iv) of the Central Bank of Nigeria (Customer Due Diligence) Regulations, 2023, is “undemocratic, unconstitutional, null and void” to the extent of its inconsistency with Section 37 of the 1999 Constitution of the Federal Republic of Nigeria (as amended).

The plaintiff also prayed the court to grant an order of perpetual injunction restraining the Bankers’ Bank from enforcing the regulation, which requires Nigerian financial institutions to request customers’ social media handles as part of the average bank customer’s due diligence requirements.

The CBN, however, in its response to the lawyer Eke’s suit, filed a notice of preliminary objection, challenging the competence of the suit, and contended that the said regulation did not interfere with the applicant’s private life, as claimed.

Justice Dimgba further held that CBN’s preliminary objection had merit, and he subsequently struck out the suit in favour of the Bank.

The Judge also ruled that a social media handle is the same as providing e-mail addresses, phone numbers, and other means by which potential customers can be contacted in financial transactions.

He maintained that it is part of due diligence to determine if the person is a fit and proper person for the bank to do business with, and as such, this regulation does not infringe on the right to privacy.

The essence of having a social media account is to be publicly visible communication-wise; it would be highly unreasonable to hold the CBN in breach of privacy, stated the Judge.

The court, therefore, ruled: “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.

“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.”

Dimgba stated in his ruling: “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.

“So the suggestion that he would be affected by this Regulation, albeit negatively, is very speculative and at large.

“Second, there is also no deposition that any financial institution had begun to implement this Regulation and that its implementation had begun to create disruptions and inconvenience against the general population, in which case one could infer that the suit should be legitimated as a public interest litigation.”

He also ruled: “Third, assuming even that the banks had begun to implement this regulation, the Applicant assuming he maintained any bank accounts or sought to open one, but is being hindered or irritated by the requirement of the Regulation to avail his social media handle as part of KYC, the Applicant still had a choice, which is to refuse to do business with any bank insisting on the information as part of its social media handle but to seek other alternatives.

“Fourth, and for all it is worth, I do not see how asking a banking or potential banking customer to provide his social media handle can ever amount to a breach of privacy.

“Granted that Section 37 of the Constitution of the Federal Republic of Nigeria 1999 (as amended) provides, among other things: ‘The privacy of citizens, their homes, correspondence, telephone conversations and telegraphic communications is at this moment guaranteed and protected.’ ”

The court held: “My view is that a social media handle is of the same genre as providing email addresses, phone numbers and other means by which a potential bank customer can be contacted.

“Thus, it is clear from the face of the Regulations as set out above that email addresses, phone numbers and social media handles are all provided for under clause 6iv just to show that the aim was not to pry on anyone but rather to provide alternative ways by which a customer of the bank can be contacted and or due diligence conducted on the person to determine if the person is a fit and proper person to extend banking services to.

“I do not see how this infringes on the right to privacy. I should even say that the essence of having a social media account was to be publicly visible communication-wise.”

The Judge said: “It, therefore, appears quite ironic, though wryly, that one can suggest that asking for information about a social media handle with which the individual exposes and immerses himself in public can amount to a violation of privacy rights, which rights itself is all about the isolation of one from public glare.

“It is also to my knowledge that even in filling some business applications, personal information of this sort is sometimes requested, and parties generally oblige. If it does not constitute a breach of privacy, why should it now?

“A social media handle is left at large for the world to see, being in the public space, everyone enjoys the liberty to have access to it whether or not consent was obtained.

“It would be highly unreasonable to hold the Respondent in breach of privacy for what other persons can access.”

Justice Dimgba added: “The applicant’s apprehension of his social interactions being monitored is manifestly speculative and somewhat incredulous to believe that the financial institutions have the luxury of time to concern themselves with such frivolities.

“On the whole, if I did not sustain the preliminary objection, I would have dismissed the suit for the reasons stated. But the preliminary objection having been sustained, the suit is, therefore, at this moment, struck out.

“I make no order as to costs.”

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