CTOS To Appeal High Court Ruling For Inaccurate Credit Rating

Recently, CTOS Data Systems Sdn Bhd (CTOS) came into the media limelight due to a High Court ruling against the firm and ordered to pay up to RM200,000 in general damages to the owner of a resort for an inaccurate credit rating.

Here’s a quick summary of the recent case.

Suriati Mohd Yusof vs CTOS

CTOS has come under fire recently as a resort owner by the name of Suriati Mohd Yusof took the company to court over a poor credit rating that saw her car loan rejected in 2019.

According to reporting by the New Straits Times, the 43-year old business woman sued CTOS for alleged negligence and breach of fiduciary duty in misrepresenting her credit rating, which resulted in a loss of reputation, personal losses as well as business losses.

Judge Datuk Akhtar Tahir eventually ruled the case in favour of Ms Suriati. He stated that: “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”.

According to the ruling, the responsibility lies with the credit reporting company to verify the credit information it provides.  The judge had also mentioned that the plaintiff had informed CTOS of the inaccurate information.

According to Judge Akhtar, the least CTOS could have done was to suspend the information in question pending verification or notify the recipient that the information was being verified.

In summary, the court found that CTOS had reached the duty of care owed to the plaintiff as well as overstepped the functions they were originally registered for under the Credit Reporting Agencies Act 2010 (CRAA).

CTOS files appeal

In response to the High Court ruling, CTOS has promptly responded and filed an appeal against the ruling.

In a Bursa filing on the same day, the company had confirmed it had filed a notice of appeal.

“Regarding the recent High Court matter between Suriati Binti Mohd Yusof (“Plantiff”) and CTOS Data Systems Sdn. Bhd. (“CDS”),a wholly-owned subsidiary of the Company, where judgement was made in favour of the Plaintiff, the Board of Directors of CTOS wishes to inform that CDS has been advised that there is basis for an appeal and consequently has lodged a Notice of Appeal to the Court of Appeal. There was no material losses anticipated as a result of this matter and no provisions shall be required.”

The role of CTOS

CTOS is one of Malaysia’s most well known credit reporting agencies. Founded in 1990, 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 the CTOS website, the company facilitates credit extensions by empowering individuals and businesses with access to crucial information; while also delivering a complete portfolio of credit risk management solutions and services.

As such, CTOS is heavily intertwined with both personal and business financing, being involved with financial institutions, insurance and telecommunications companies, large and small businesses, as well as legal firms and statutory bodies.

By their words, CTOS does not evaluate or make recommendations on credit applications.