The Credit Reference Bureau (CRB) regulations were not only designed to protect lenders but borrowers alike.
Any aggrieved borrower is covered by the law and can take several steps to remedy the situation. CRBs operate under the Credit Reference Bureau Regulations 2013.
30 Day Notice
Key regulations protecting customers include Regulation 25 which among others, require lenders to give customers at least 30 days’ notice before submitting negative information.
It also requires lenders to ensure that data submitted is accurate and if not, it should be corrected as soon as the anomaly is detected.
Customer Confidentiality
Regulation 26 protects confidentiality of the customer’s information by restricting those to whom the information can be released to.
Under Regulation 35, a customer should be informed of the information submitted to the bureau and finally under regulation 50, a customer is to be informed within 30 days that his name has been submitted to CRBs.
Customer Rights and Entitlements
A borrower is also entitled to an Adverse Action Notice which in essence is a report that information from the bureau has been used in a way that is adverse to his interest.
Lenders have in the recent past violated the rights of the customers by, for instance, supplying inaccurate or false information to CRBs thereby portraying the customers as uncreditworthy.
In the case of Antony Kinyua Mwaniki vs KCB & Transunion CRB [2017] eKLR, the bank had issued inaccurate information leading to the loss of some agency business as well as lending by other financiers. The court found the bank culpable for publishing inaccurate information, a breach of statutory duties and negligence, for which an award of Sh400,000 was made.
Similarly, in Raphael Karuu Gitau vs Barclays bank [2017] eKLR, the bank listed the plaintiff as a bad debtor and failed to act on his complaint. As a result, the plaintiff was denied credit by both Equity and NIC banks. The court found the bank to have defamed the customer and awarded the sum of Sh1 million in damages.
Correction of Inaccurate Information
Besides and even preferably before going to court, an aggrieved party is at liberty to request for the correction of inaccurate information and if not done, then he can escalate the issue to the courts.