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Banks can demand customers’ social media handles, court rules

Banks can demand customers' social media handles, court rules Banks can demand customers' social media handles, court rules
Sankt-Petersburg Russia, March 6, 2018: Apple iPhone X on office desk with icons of social media facebook, instagram, twitter, snapchat application on screen. Social network. Starting social media app. Photo taken at company office

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”.

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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.

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“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. 

“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”.

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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.

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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. 

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

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