Failure To Update CIBIL Score, Ludhiana District Commission Holds Standard Chartered Bank Liable

Brief Facts:

The matter pertained to a credit card issued to the Complainant by the Standard Chartered Bank (“Bank”). In 2005, an outstanding amount of Rs. 6991/- was recorded in the credit card account of the Complainant, which was settled through a mutual agreement. The Complainant paid Rs. 5000/- as a full and final settlement. In 2019, the Complainant applied for a car loan from Oriental Bank of Commerce (“OBC”) to purchase a TATA Harrier Car from Dada Motors, Ludhiana. However, the loan was declined due to an unsatisfactory CIBIL Score of the Complainant, indicating an outstanding amount of over Rs.1,00,000/- against the bank. When the Complainant contacted the bank, it acknowledged an error on its part and assured the Complainant to rectify the issue by updating the card status and reversing the outstanding amount. Despite this, the Complainant faced financial repercussions as OBC refused the loan, leading him to additional expenses in securing a loan from TATA Motors. The Complainant made several communications with the bank but didn't receive any satisfactory response.

Thereafter, the Complainant approached the District Consumer Disputes Redressal Commission, Ludhiana (“District Commission”) and filed a consumer complaint against the bank. The bank didn't appear in the District Commission for the proceedings. Therefore, it was proceeded against ex-parte.

Observations by the District Commission:

The District Commission noted that the bank admitted to initiate the reversal of the entire outstanding amount reflected in the Complainant's card account. The bank further assured the Complainant that the card status had been permanently invalidated in their records and that steps were being taken to update the CIBIL status accordingly.

The District Commission held that despite the Complainant not making any further payments to the bank, the rectification of the CIBIL score was initiated solely based on the Complainant's representation. However, it noted that the bank failed to fulfil its obligation to promptly convey the requisite information to update the CIBIL records. Consequently, the District Commission held the bank liable for deficiency in services.

Regarding the Complainant's contention of suffering a financial loss due to obtaining a loan at a higher interest rate, the District Commission observed that TATA Motors had already advanced the loan of Rs. 14,00,000/- to the Complainant before the rectification of the CIBIL score by the bank. Hence, it held that attributing the entire financial loss solely to the bank's actions was deemed untenable. However, the District Commission directed the bank to pay Rs. 20,000/- compensation to the Complainant.