CBN Obtains Court Approval to Collect Customers Social Media Handles

The CBN has been approved to go after customers' social media handles in what the Federal High Court called "constitutional KYC rights." This verdict was passed by Justice Nnamdi Dimgba who sits at the Federal High Court in Lagos. He stated that the Central Bank of Nigeria (CBN) has the constitutional right to request social media handles of their customers as the ongoing process of having a reputable Know-Your-Customer procedure and, according to the nation, doesn't violate a breach of privacy.

He ruled over the cases filed by Chris Eke, a Lagos-based lawyer who requested that the court stop the CBN from going after its customers' social media handles. This has made headlines before now, as many cried that the CBN was crossing its boundaries in a bid to create a safe financial environment.

According to the report online, Chris Eke prayed the court 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).

He also asked the court to grant a perpetual injunction that would stop the CBN from enforcing the regulation. The regulation requires financial institutions to request customers' social media handles as part of the average bank customer due diligence requirement.

However, in response to the suit, the CBN filed an objection challenging Eke's suit, which they defended by saying that the regulation does not plan to interfere with the applicants' private lives as claimed.

The judge further held that a social media handle is the same as providing email addresses, phone numbers, and other means by which potential customers can be contacted before he struck out the suit.

Justice Nnamdi Dimgba also added that it was part of the apex bank's due diligence to determine if the person was fit for the bank to partner with, and as such, these regulations do not infringe on the right to privacy.

THE COURT VERDICT READS,

"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.

"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.

"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 guaranteed and protected.

"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.  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.

"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," the judge held.

Back Story

Last year, we reported how the Socio-Economic Rights and Accountability Project (SERAP) called Mr. Folashodun Shonubi, the acting Governor of the Central Bank of Nigeria (CBN), to remove certain provisions in the newly edited Central Bank of Nigeria (Customer Due Diligence) Regulations. The advocacy group expressed concerns about including directives requiring banks to collect customers' social media handles for identification purposes, which SERAP deems patently unlawful.

In the letter dated June 24, 2023, and signed by SERAP deputy director Kolawole Oluwadare, the organization not only called for the removal of these provisions but also urged the withdrawal of Circular number FPR/DIR/PUB/CIR/007/076, issued on June 20, 2023. This circular mandates banks and other financial institutions to comply with the unlawful requirements concerning customers' social media handles as outlined in the CBN Regulations.

SERAP highlighted the sections of the CBN Regulations, specifically Section 6(a)(iv) and Section 6(b)(iii), which place an obligation on banks and financial institutions to identify customers and collect information on their social media handles. The organization argues that these requirements infringe upon Nigerians' rights to freedom of expression and privacy, rendering them inconsistent with the rule of law.