THE UPDATE SCOOP (#10/2024)
NO Duty of Care owed by CTOS │ Tort
COA Overturned High Court Decision
By TAY & HELEN WONG – August 20, 2024
In our Blog No. 5 # 2024, we featured a groundbreaking decision of the High Court in Suriati Mohd Yusof v CTOS Data Systems Sdn Bhd [2024] 3 MLRH 688 (the HC Decision) which ruled that CTOS Data Systems Sdn Bhd (CTOS), the credit reporting agency in Malaysia, owed a duty of care to verify and provide accurate credit information not only to the financial institutions but also to persons concerned to whom the information was related; and that CTOS had no power under the Credit Reporting Agencies Act 2010 (the 2010 Act) to formulate credit scores.
On 9 August 2024, the Court of Appeal (COA) overturned the HC Decision, see: CTOS Data Systems Sdn Bhd v Suriati Mohd Yusof, Civil Appeal No.: W-02(NCvC)(W)-230-02/2024. The appellate court held that based on the circumstances of the case, the credit reporting agency did not owe a duty of care to the plaintiff as a customer as defined in the Credit Reporting Agencies Act 2010. It remarked:-
“Webe Digital Sdn Bhd (Webe) is a subscriber to the services of Defendant. Defendant provides a service where a subscriber may upload information of debts owed to the subscribers by 3rd parties. This is broadly known as trade reference which is reflected in Section E of the Defendant’s credit report. Webe is an internet service provider and the Plaintiff was its customer. Webe uploaded information of the Plaintiff’s indebtedness in the sum of RM2,186.60.”
The COA went on to state that even if there was a duty of care, there was still no breach of the duty as the information could not be said to be inaccurate, incomplete, misleading or irrelevant. Not only the plaintiff’s indebtedness to Webe was admitted by the plaintiff in another suit, it was Webe themselves who negotiated a settlement (with the plaintiff) and there was nothing inaccurate about the fact that the plaintiff indeed had defaulted on her payment obligations to Webe.
It was also found that there was no connection proven between the rejection of her car loan application and the contents of the credit report. There was also no evidence of any rejection by banks of facilities having been applied nor that the rejection of the car loan was premised on a low credit score.
It is our respectful opinion that the grounds are not entirely clear as to why the CIOA had ruled that the credit reporting agency did not owe a duty of care to the plaintiff as a customer. It is hoped that Federal Court (if there is a final appeal) will provide clarity to the position of law in due course. Until then, the law on duty of care owed by CTOS to persons concerned to whom the credit information is related is as per the COA decision.
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Tags: [negligence] [credit reporting] [duty of care] [Credit Reporting Agencies Act 2010] [creditworthiness]