Consumer Court Chandigarh held SBI cards guilty for deficiency of service

INTRODCUTION

The District Consumer Disputes Redressal Commission-II, U.T. Chandigarh recently ruled against SBI Cards & Payment Services Pvt. Ltd. in a case involving wrongful reporting to CIBIL

FACTS AND BACKGROUND

In this matter, the consumer had fully settled their credit card dues through a full and final settlement agreement. The company issued a 'No Dues' certificate' or acknowledgement confirming the account was cleared.

Despite this settlement, the company failed to update the consumer's credit status properly with CIBIL. Years later, the consumer began receiving harassing calls demanding payment for an alleged outstanding amount. Upon checking their CIBIL report, the individual discovered they were still marked as a defaulter or had a negative entry due to the outdated/unresolved reporting.

The consumer filed a complaint alleging deficiency in service and unfair trade practice under the Consumer Protection Act.

OBSERVATIONS

The Commission, held SBI Cards & Payment Services Pvt. Ltd. guilty on both counts. Key reasoning included:

- Once a full and final settlement is accepted and the account is closed, the lender is obligated to report the account as "closed" or settled appropriately to credit bureaus like CIBIL, without retaining a defaulter tag.

- Continuing to report the consumer as a defaulter after settlement constitutes a serious lapse.

- This error can severely impact the consumer's creditworthiness, blocking access to future loans, credit cards, housing finance, vehicle loans, job opportunities, or even visa processing.

The forum directed SBI Cards to:

- Immediately ensure the removal of the complainant's name from the CIBIL defaulter list if not already corrected.

- Pay compensation for harassment, mental agony, and litigation expenses.

CONCLUSION

This ruling aligns with broader consumer protection principles in India: Banks and financial institutions must promptly update credit information post-settlement, and failure to do so can lead to liability for deficiency in service.

Comments

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