Understanding Your Rights in Cases of Inaccurate CTOS Scores
In the age of rapid digitalization and data-driven decision-making, the concept of credit scoring has become increasingly prevalent. Among these scoring systems, the Credit Tip-Off Service (CTOS) score holds significant sway, influencing various aspects of individuals’ financial lives, from loan approvals to job opportunities.
However, what happens when this crucial metric is marred by inaccuracies?
In a recent ruling by the High Court, as in the case of Suriati binti Mohd Yusof v CTOS Data Systems Sdn. Bhd. [2024] MLJU 437, it was established that the Defendant holds the responsibility to verify the credit information received and to ensure the accuracy of the credit information it provides. To put it plainly, CTOS is obligated to exercise a duty of care towards individuals affected by the information provided, in ensuring the provision of accurate credit information.
Reference was also made to Section 29 of the Credit Reporting Agencies Act 2010 where it stipulates that :-
29. Accuracy of Credit Information
(1) A credit reporting agency shall not use or further process any credit information without taking such steps as are in the circumstances reasonable to ensure that the credit information is accurate, up-to-date, complete, relevant and not misleading.
(2) A credit reporting agency shall, when undertaking a comparison of credit information within its control with any other credit information for the purpose of producing or verifying information about an identifiable customer, take such measures as are reasonably practicable to avoid the incorrect matching of the credit information.
(3) Without limiting the generality of subsection (1), a credit reporting agency shall –
(a) establish and maintain controls to ensure that, as far as is reasonably practicable, only credit information that is accurate, up-to-date, complete, relevant and not misleading is used or further processed ;
(b) monitor credit information to ensure that it is accurate, up-to-date, complete, relevant and not misleading ; and
(c) conduct regular checks on compliance with the controls.
(4) A credit reporting agency which contravenes this section commits an offence and shall, upon conviction, be liable to a fine not exceeding five hundred thousand ringgit or to imprisonment for a term not exceeding two years or to both.
The Defendant’s reliance that any information provided was with a disclaimer that any information provided was subject to verification by the parties applying for the report and that it was not its duty to verify its accuracy as its role was merely to collate information was therefore rejected and dismissed by the High Court.
Considering the inaccurate information provided, leading to the Plaintiff being wrongly classified as delinquent, the Defendant was ordered by the Court to compensate the Plaintiff for her losses.
Previously the Court of Appeal has also addressed a similar issue in the case of Tan Ah Hong v CTOS Data System Sdn. Bhd. [2016] MLJU 504, whereby the Court found that the credit information stored in the Respondent’s database, indicating the Appellant’s indebtedness to various financial institutions, individuals and companies (information that was outdated), amounted to defamation. Consequently, the Respondent was ordered to pay damages to the Appellant.
Based on the two cases above, it is evident that CTOS holds a duty of care towards individuals, not only in collating data but also in ensuring its accuracy. It is therefore imperative for individuals to be aware of their rights and avenues for recourse in cases of inaccurate CTOS scores.
If you have any questions or require any additional information, please contact our lawyer that you usually deal with.