In a significant ruling that underscores the importance of accurate credit reporting, the District Consumer Disputes Redressal Commission in Chandigarh has penalized a leading credit card company for a costly mistake in a consumer's CIBIL record. The commission directed the firm to rectify the error and pay Rs 20,000 in compensation for the mental harassment and litigation costs inflicted upon a resident.
The Harassment Over a Settled Debt
The case revolved around a resident of Sector 18 in Chandigarh who had diligently cleared his credit card dues through a full-and-final settlement of Rs 18,000 in 2007. Upon payment, he was issued an official 'No Dues' certificate, which should have closed the matter permanently. However, more than a decade later in 2020, his peace was shattered.
The consumer began receiving persistent calls from the company, claiming an outstanding amount of Rs 11,652. Alarmed, he checked his CIBIL report and discovered, to his shock, that he was wrongly flagged as a loan defaulter. This erroneous tag threatened his financial credibility.
Company's Inaction and Consumer's Fight
Armed with his proof of payment from 2007, the complainant approached the credit card company. While staff members allegedly acknowledged the error and promised corrective measures, no concrete action was taken to cleanse his credit history. The company's failure to act left the consumer grappling with the defaulter tag.
During the commission proceedings, the company presented an argument that the account had been transferred to another bank in 2016 as part of a securitisation process. However, the commission firmly noted that since the dues were conclusively settled in 2007, the account should never have been reported as a default thereafter. The commission also recorded a crucial fact: the bank that later handled the account had itself issued a no-dues certificate in 2021, confirming no outstanding payments.
Verdict and Broader Implications for Credit Health
The commission observed that the prolonged inaction by the company forced the consumer into unnecessary correspondence and legal battle, causing significant harassment. It ordered the credit card company to immediately ensure the removal of the complainant's name from the CIBIL defaulter list, if not already done, and to pay the compensation.
This case highlights a critical issue for Indian consumers. Errors in CIBIL or other credit bureau records can have severe repercussions, including:
- Blocked access to new bank loans, housing finance, and vehicle loans.
- Rejection of credit card applications.
- Potential negative impact on job opportunities, especially in financial sectors.
- Complications in visa processing for certain countries.
The Chandigarh commission's ruling serves as a strong reminder to financial institutions to maintain meticulous records and act promptly on consumer grievances. For individuals, it reinforces the necessity of regularly checking one's credit report and aggressively disputing any inaccuracies to safeguard financial health.
