A man has been awarded Sh500,000 after he was denied a loan because of a Sh3 listing on the Metropol Credit Reference Bureau (CRB).
Josh Teddy Amwago sued Ecobank Limited for listing him as a defaulter on the CRB without informing him.
The facts of the case are that Dr Amwago opened a bank account with Ecobank at its Kitale branch in October 2010. He applied for a loan from Eclof Kenya Limited, but was denied because Ecobank had listed him as having a non-performing loan on the CRB.
When he inquired with the bank, he discovered that his bank account had been debited with maintenance fees, interest charges and excise duty amounting to Sh11,540. After questioning the bank about these deductions, the bank credited his account with the same amount, effectively reversing the debits.
Dr Amwago claimed that he was forced to pay Sh11,877 to update his credit status. He stated that on January 25, 2017, the bank issued him with a letter confirming that his overdrawn current account had been cleared and that his credit status with the CRB would be updated.
However, he was frustrated to learn that the bank had failed to relay this information to the CRB. As a result, the CRB continued to display incorrect information, showing that his account had an outstanding balance of Sh3 and that the last payment had been made on December 20, 2013.
Dr Amwago said that this misinformation led to the rejection of his loan application under KCB Bank’s KCB-M-Pesa loan scheme.
Aggrieved, Dr Amwago sought general and aggravated damages as well as a refund of the Sh11,877 he had paid to rectify his credit status.
Dr Amwago argued that the bank had breached both banking regulations and its contractual obligations by failing to follow standard procedures for dealing with dormant accounts and by failing to inform him of the status and classification of his account, as required by standard banking practice.
He added that despite his request the bank did not close his account.
Ecobank defended its actions, stating that Dr Amwago’s account was indeed in arrears due to unpaid banking charges. The bank claimed that it was obliged to report such information to the CRB and that it could not be held responsible for the consequences of the listing.
The bank also said that when Dr Amwago settled the outstanding balance in January 2017, it provided a letter confirming the account’s regularisation, but this did not amount to a guarantee that his CRB record would be updated immediately.
Additionally, Ecobank argued that Dr Amwago was partly to blame for the situation as he had left his account dormant without sufficient funds to cover banking fees.
The Kitale Chief Magistrate’s Court ruled that while Ecobank had erred in failing to notify Dr Amwago before listing him with the CRB, it also found him partly responsible for neglecting his account. The court noted that current accounts are subject to maintenance fees and dismissed Dr Amwago’s claim for damages.
Dissatisfied with the outcome, Dr Amwago appealed to the High Court in Kitale, arguing that the chief magistrate erred in taking judicial notice without concrete evidence, failed to appreciate the impact of the wrongful listing, and was wrong in denying him damages and costs. He sought Sh2 million in general damages and Sh3 million in aggravated damages.
In a decision dated March 21, 2025, Justice Anthony Mrima ruled in favour of Dr Amwago. The judge found that the bank had violated banking regulations by failing to notify Dr Amwago before listing him as a defaulter.
“A bank or other financial institution which fails to undertake the above crucial step of serving the mandatory notice to its customer and instead unilaterally forwards the adverse information to any registered credit reference bureau acts in violation of the law and as equity has it, there can be no wrong without a remedy. This was, therefore, a case in which the appellant’s rights were variously infringed and the law fragrantly ignored. The result is that the respondent must be held culpable for such actions hoping that it will be more careful when handling such sensitive issues going forward,” read the court’s ruling.
The court awarded Dr Amwago Sh500,000 in general damages.
