Economy

Users allowed to sue Safaricom over clients bank details access

DNSimcardRegistration07

City residents queue outside a Safaricom shop along Kimathi street, Nairobi on April 7, 2022, in a rush to beat the sim registration deadline. PHOTO | LUCY WANJIRU | NMG

The High Court has allowed millions of Safaricom subscribers to join a class action suit against the telecoms operator over a clause in the SIM card registration rules that allows the firm to collect bank details of mobile phone users.

Clause 3.2.1 in the data privacy statement, which subscribers filled as part of the re-registration process, states that the telecoms operator can “collect and store information including credit or debit card information, information on bank account numbers, Swift codes or other banking information”.

High Court judge Chacha Mwita allowed two senior counsels — Wilfred Nderitu and Charles Kanjama—to invite other subscribers to the class action suit through the press for Safaricom to delete the clause.

The judge directed the lawyers to publish a notice in a daily newspaper, inviting Kenyans who may wish to join the suit.

The clause appears in a 58-page document that has the terms and conditions attached to last year’s update of SIM card registrations.

The lawyers reckon that Safaricom’s dominance of the Kenyan mobile market forced subscribers to accept the clause, arguing that users had no leverage to decline inking the SIM card registration rules.

Safaricom’s market share stood at 66 percent in September while that of rivals Airtel and Telkom Kenya stood at 26.3 percent and 4.9 percent respectively.

“As such, the stringent mechanisms and crafty ways of collecting data without assurance of data security are precipitated by the thought that its clients have no option but to opt-in for them to continue enjoying the products and services that it offers,” Mr Nderitu said.

Safaricom opposed the class action suit before the judge agreed to the invitation of other subscribers to challenge the giant telco.

Also read: Safaricom stock rout offers telco savings on share compensation

The US-style class action suit is where one or several people sue on behalf of a much larger group, and if successful all consumers aggrieved stand to get compensated.

This is the second class action suit brought against Safaricom and the Communications Authority of Kenya (CA), the sector regulator after a customer sued them over SIM Swap fraud that has seen scammers drain millions of shillings from the mobile phone subscriber's bank accounts.

The case is pending before the court. Businessman Abdi Zeila wants the CA to be found negligent of its regulatory duties by allegedly failing to ensure Safaricom is providing services that are secured from fraudsters.

Justice Mwita also directed Safaricom and the CA to file their defence within seven days in the class action suit related to the bank details.

The case will be mentioned on March 14.

Mr Nderitu says that Clause 3.2.1 provided that Safaricom would collect his personal financial information with his knowledge and consent whenever he carries out mobile banking services through the telecom's operator.

He and Mr Kanjama want the court to grant a temporary order stopping Safaricom from effecting the data privacy statement because there is a real danger that their rights will be violated, causing them harm that cannot be compensated through damages.

“That as a giant telecommunications company, 1st defendant is aware of its market dominance and widespread use across the country. Further, it is aware that it has the biggest customer base among the telecommunications companies in Kenya, further leading to high reliance by the citizenry,” Mr Nderitu says in an affidavit filed in court.

Mr Nderitu says he has been a Safaricom subscriber for the past 23 years and a registered M-Pesa user since 2007, while Mr Kanjama has been a Safaricom subscriber for more than 20 years.

“That on 15th October 2022, I learnt with utter shock and dismay that my SIM card had been suspended. As a result, I could not make calls, send messages, access my M-Pesa wallet or make any payments,” Mr Kanjama said.

The CA had in February this year directed mobile operators to ensure registration details of all its subscribers by April 15 last year as per the Kenya Information and Communications (Registration of SIM-cards) regulations. The deadline was extended by six months.

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Mr Nderitu says when he registered his line over two decades ago, he gave his identity card to an authorised dealer and was successfully registered.

But on October 15, he received a message telling him to register his number and thought it was a mistake.

He registered the line but says the process unreasonably burdens him as a subscriber to ensure the SIM card is registered yet Safaricom has all the details required for the purpose.

“This does not rhyme with my legitimate expectation that once I have registered and been on-boarded onto the platform, the 1st defendant [Safaricom] has a duty to ensure that I enjoy unfettered access to the products and services for as long as I pay the predetermined rates,” he says.

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