Customer denied Car Loan due to wrong CIBIL report, Court takes action against Bank

The District Consumer Dispute Redressal Commission recently ruled in favor of a city resident, Deep Preet Singh, directing Standard Chartered Bank to pay compensation for a car loan application rejection caused by a bank error.

In 2019, Singh applied for a car loan from Oriental Bank of Commerce, but it was rejected due to an outstanding amount of over ₹1 lakh reported by Standard Chartered Bank in his CIBIL report. Singh, having already settled his dues with Standard Chartered, contested the rejection, claiming a deficiency in service.

Complaint and Claims:

Singh filed a complaint seeking ₹59,892 for the loss incurred, along with compensation of ₹1 lakh and litigation expenses of ₹25,000. He argued that the rejection led him to opt for a higher-interest car loan from Tata Motors.

Chronology of Events:

• Singh availed a credit card from Standard Chartered Bank in 2005.
• In 2006, after mutual discussions, he settled an outstanding amount of ₹6,991 by paying ₹5,000 to the bank.
• In 2019, he applied for a car loan, leading to the loan rejection from Oriental Bank of Commerce due to the reported outstanding amount by Standard Chartered Bank.
• Singh contacted Standard Chartered Bank, which acknowledged the error and assured rectification of his CIBIL score.

Consumer Forum Ruling:

The consumer forum, in an ex-parte order, noted that the bank’s failure to update CIBIL records after settling the amount constituted a deficiency in service. It emphasized that the bank should have provided necessary information to Credit Information Bureau India Limited (CIBIL) post-settlement.

Compensation Awarded:

The commission ordered Standard Chartered Bank to pay ₹20,000 as compensation to Singh within 30 days from the date of receiving the order.