Barclays to pay former customer Sh1 million for erroneously referring him to CRB

Barclays Bank has been ordered to pay a former customer Sh1 million for erroneously reporting him to a Credit Reference Bureau (CRB).

Raphael Karuu, the bank’s former Prestige member, withdrew his membership in 2006 and closed the two accounts he operated with the lender. The bank slapped him with a demand letter to pay Sh46,000 or be reported to the CRB. The businessman declined to pay the amount, maintaining that he did not owe the bank anything.

High Court judge Francis Tuiyott heard that Barclays Bank went ahead to report Mr Karuu to the agency, leading to his blacklisting as a bad debtor. He was, as a result, denied a Sh5 million loan he applied for from Equity Bank and a further Sh2.6 million from NIC Bank.

Mr Karuu said Barclays promised to rectify the mistake in 2010 after he raised the issue, but failed to do so, prompting him to seek legal redress.

Justice Tuiyott said he found the conduct of the bank ‘wanting’.

“As it later turned out that the demands were erroneous, this court must find that the bank was reckless when if forwarded the adverse report to the CRB,” he said. 

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