KUALA LUMPUR: The High Court recently CTOS Data Systems Sdn Bhd (CTOS) to pay RM200,000 in general damages to the owner of a resort for an inaccurate credit rating.
The news was welcomed by social media users and also raised interest in the company.
The New Straits Times takes a closer look at CTOS and the judgment against the company.
Who is CTOS?
Founded in 1990, CTOS is the country's leading credit reporting agency and comes under the purview of the Finance Ministry via the Registrar Office of Credit Reporting Agencies. It is regulated under the Credit Reporting Agencies Act 2010.
According to CTOS' website, it facilitates credit extensions by providing access to "crucial information" and delivers a complete portfolio of credit risk management solutions and services.
It says its services are widely used by financial institutions, insurance and telecommunications companies, large and small businesses, as well as legal firms and statutory bodies.
CTOS says it does not "evaluate or make recommendations on credit applications".
Suriati Mohd Yusof vs CTOS
In the case reported earlier today, Suriati Mohd Yusof, a resort owner took CTOS to court over a credit rating that saw her application for a car loan rejected.
The 43-year-old businesswoman sued CTOS for alleged negligence and breach of fiduciary duty in misrepresenting her credit rating.
Judge Datuk Akhtar Tahir, who presided over the case ruled in Suriati's favour. Here are the excerpts from his judgment.
"The defendant's (CTOS) main role is to collect, record, hold, and store the information received. The defendant is also empowered to disseminate the information to its subscribers and this included (the) financial institution."
On the accuracy of the credit report itself, the judge said under the law, CTOS must verify credit information for the purpose of "using or processing" the said information.
However, the recipient of the information is not duty-bound to "independently verify" the credit information.
Negligence and breach of duty
Akhtar said Suriati alerted CTOS that the information against her was inaccurate.
"The evidence in this case shows that the defendant chose to ignore the communication from the plaintiff (Suriati) and continued to maintain the said information."
Akthar said the least CTOS could have done was to suspend the information pending verification or notify the recipient that the information was being verified.
"By choosing to be indifferent even after being alerted by the plaintiff, the defendant has clearly breached the duty of care owed towards the plaintiff."
Credit score
Aside from giving out credit information, CTOS also formulated a credit score for Suriati based on criteria including payment history, amount owed, and credit history among others.
However, Akhtar said this is not in line with the Act.
"In the Court's view, there is no provision in the Act empowering the defendant to formulate a credit score or empowering the defendant to create its own criteria or percentage to formulate a credit score.
"The Defendant is just supposed to be a repository of the credit information to which the subscribers have access.
"Based on the evidence adduced in this case the Court finds that the defendant has breached the duty of care owed to the plaintiff as well as overstepped the functions they were registered for."
