Wrongful blacklisting of client costs National Bank Sh200,000

The court imposed the penalty after the bank admitted it forwarded Christine Masinde’s name to the Credit Reference Bureau (CRB) by mistake.PHOTO: COURTESY

National Bank’s erroneous listing of a client as a loan defaulter has cost it Sh200,000 plus interest as compensation for embarassing her.

The court imposed the penalty after the bank admitted it forwarded Christine Masinde’s name to the Credit Reference Bureau (CRB) by mistake.

High Court judge Charles Kariuki, however, declined Ms Masinde’s push for a higher award, noting that the lender rectified the error and also vouched for her in her loan application with Kenya Commercial Bank (KCB).

“The defendant has accepted the error and acted in mitigation in getting plaintiff delisted and urging KCB to advance a loan to the plaintiff. The court, thus finds that the plaintiff did not suffer a great deal of damages as testified by her. She has not demonstrated any loss arising from delay in getting the KCB loan,” ruled Justice Kariuki.

“The court, therefore, awards the plaintiff on financial embarrassment and unlawful listing with CRB as a loan defaulter by an award of general damages of Sh200, 000 costs and interest.”

Justice Kariuki noted that the lender did not justify that it was not at fault, but that it acted negligently. Ms Masinde had taken a loan from National Bank, Kakamega branch and fully settled the amount.

However, she was shocked to find her name in the CBR’s black list over alleged default and had her request for a loan with KCB turned down.