CfC Stanbic fined Sh1m for wrong credit bureau listing

CfC Stanbic Bank #ticker:CFC has been ordered to pay a senior government employee Sh1 million after listing his name at a credit reference bureau (CRB) as a defaulter.

Mwenda Njoka and Hilda Kaari sued the bank and Credit Reference Bureau Africa Ltd, accusing them of tarnishing their names by listing them among loan defaulters.

The court heard that they applied for a Sh11 million mortgage in 2008 at CfC Stanbic for a house in Kileleshwa and repaid the loan on November 25, 2010 after running into default.

The two were later denied a loan from Barclays Bank on grounds that CfC Stanbic had forwarded their names for negative listing at Credit Reference Bureau Africa Ltd.

After hearing the case, Justice Grace Nzioka noted that at the time the names were forwarded to the bureau, they had repaid the loan.

“In conclusion I find that indeed the plaintiffs defaulted on the repayment of the loan and they were served with the default notice and notice of listing. However, the listing was not done immediately and subsequently, the plaintiffs fully repaid the loan. At the time of listing, the loan was fully repaid,” the judge said.

She, however, absolved the bureau of any blame, saying the bank was wholly to blame for the incorrect information.

The judge granted Mr Njoka and Ms Kaari Sh1 million, stating that there was no evidence that the failure to purchase the house was purely because of the adverse listing that denied them the Barclays loan.

The bank said the two received two notices on December 14, 2009 that their names would be submitted to the bureau within 14 days due to their persistent defaulting.

At the time, Mr Njoka and Ms Kaari opted to resell the Kileleshwa property for Sh19.5 million and the funds were channelled through the mortgage account the bank deducted its debt of Sh11.9 million and the mortgage account closed.

CfC Stanbic said that it did not regularise their accounts in accordance with the notice and consequently, their details were forwarded to the bureau.

The bureau, for its part, said it was mandated by the regulations to facilitate the sharing of information concerning non-performing loans between institutions licensed under the Banking Act.

Mr Njoka and Ms Kaari had accused the bureau of failing to implement strict quality control procedures in order to ensure the maximum possible accuracy of its database or failed to take reasonable steps to ensure that the information it maintained, was current, authentic and reliable.