Wrongful CIBIL Reporting After Full Settlement Amounts To Deficiency In Service: Chandigarh District Consumer Commission Holds SBI Cards Liable
The District Consumer Disputes Redressal Commission-II, U.T. Chandigarh, comprising President Amrinder Singh Sidhu and Member Brij Mohan Sharma, has held SBI Cards & Payment Services Pvt. Ltd. guilty of deficiency in service and unfair trade practice for reporting a consumer as a CIBIL defaulter despite full and final settlement of credit card dues.The Commission held that once a borrower...
The District Consumer Disputes Redressal Commission-II, U.T. Chandigarh, comprising President Amrinder Singh Sidhu and Member Brij Mohan Sharma, has held SBI Cards & Payment Services Pvt. Ltd. guilty of deficiency in service and unfair trade practice for reporting a consumer as a CIBIL defaulter despite full and final settlement of credit card dues.
The Commission held that once a borrower has cleared all outstanding dues and the creditor has acknowledged the same, the account cannot be treated as a defaulted account, nor can the consumer's credit record be adversely affected.
Brief facts
The complainant, Sanjay Singla, was issued a credit card by SBI Cards & Payment Services Pvt. Ltd. In January 2007, he cleared all outstanding dues by making a full and final payment of ₹18,000, pursuant to which SBI Cards issued a receipt endorsing “No Dues.”
However, in October 2020, SBI Cards started demanding a further sum of ₹11,652 and reported the complainant as a defaulter to CIBIL. Upon checking his credit report, the complainant found that his credit profile had been adversely affected. Despite producing the settlement receipt, the records were not corrected.
It was further revealed that SBI Cards had assigned the already-settled account to Kotak Mahindra Bank in 2016. Kotak Mahindra Bank subsequently issued a No Dues Certificate confirming full and final settlement of the account.
Aggrieved by the continued wrongful reporting and harassment, the complainant approached the Consumer Commission seeking correction of his credit record and compensation.
Contentions of the opposite party
SBI Cards contended that the account had been sold and assigned to Kotak Mahindra Bank in 2016 and that Kotak was responsible for further action. It was submitted that no demand had been raised after 2016 and that the No Dues Certificate was obtained from Kotak only as a special measure to settle the matter, without admitting any liability. The opposite party denied any deficiency in service.
Observation and Decision of the Commission
The Commission observed that the complainant had paid the full and final settlement amount on 28.01.2007, which was duly acknowledged. It further noted that Kotak Mahindra Bank had also issued a No Dues Certificate confirming full settlement of the account.
The Commission held that reporting the complainant as a defaulter and transferring the settled account to another bank despite receipt of full payment amounted to deficiency in service and unfair trade practice.
Accordingly, the Commission directed SBI Cards to remove the complainant's name from the CIBIL defaulters list, if not already done, and to pay ₹20,000 as compensation for harassment and mental agony, including litigation costs.
Case Title: Sanjay Singla v. SBI Cards & Payment Services Pvt. Ltd.Case No.: CC/139/2021