Bank of Africa to Pay Customer KSh200,000 After Court Declares CRB Listing Unlawful

Justice Joseph Sergon says banks can report genuine defaults but must first prove accuracy, notice, and regulatory compliance.

Bank of Africa Kenya Limited has lost an appeal over an adverse Credit Reference Bureau (CRB) listing.

The High Court upheld a KSh200,000 award to borrower Francis Kibuchi Miano after finding procedural failures.

Justice Joseph Sergon dismissed the bank’s appeal on September 17, 2026, with costs.

The judgement arose from a 2022 decision by Nakuru Senior Resident Magistrate Edward Oboge.

Loan Dispute

The dispute began with a KSh780,000 loan advanced to Miano by Bank of Africa.

The facility was repayable over 72 months through salary deductions arranged under a check-off system.

The bank later reported adverse credit information concerning Miano to the Metropol Credit Reference Bureau.

It argued that Miano’s account repeatedly fell into arrears because his employer delayed remitting deductions.

The bank said the first instalment arrived in May 2015, months after loan disbursement.

It further maintained that subsequent installments were similarly delayed, leaving the account periodically in arrears.

Miano accepted receiving the loan but disputed the bank’s handling of his account.

He claimed the bank closed his original loan account without consent and opened another account.

The disputed account became the basis for his adverse CRB listing.

Miano also said the bank never warned him about arrears or impending negative credit reporting.

He discovered the listing only after approaching Unaitas Sacco for additional financing.

That distinction became central to Justice Sergon’s determination of the appeal.

Notice Missing

The High Court accepted that banks have statutory authority to furnish credit information.

However, Justice Sergon stressed that such authority comes with mandatory statutory safeguards.

Under Regulation 25, negative credit information required advance notification to the affected customer.

The same regulation prohibited submission of information known or reasonably believed to be inaccurate.

The bank argued that evidence of arrears justified the adverse listing despite the circumstances.

Justice Sergon rejected that proposition, finding that arrears alone could not establish lawful negative reporting.

The bank also failed to adequately explain the disputed account that allegedly supported Miano’s listing.

Its submissions did not clearly connect that account to Miano’s original contractual facility.

Nor did they demonstrate that information transmitted to Metropol accurately represented his credit position.

More damagingly, the bank failed to identify evidence showing that Miano received the required statutory notice.

Its submissions did not provide the notice date, contents, or method through which notice was served.

That omission proved significant because Miano had specifically placed compliance with Regulation 25 in dispute.

Justice Sergon said a party asserting statutory compliance must provide evidence demonstrating that compliance.

He found that the bank had failed to establish compliance with the mandatory requirements governing negative credit reporting.

Bank Still Liable

The bank also argued that Metropol was a separate legal entity and should bear responsibility.

Its lawyers maintained that Metropol was neither the bank’s servant nor its agent.

The High Court accepted that Metropol was legally separate but rejected the broader liability argument.

Miano’s complaint concerned information supplied by the bank, rather than information independently created by Metropol.

The Bank therefore remained responsible for the accuracy of information it transmitted to the Bureau.

Justice Sergon relied on earlier jurisprudence concerning inaccurate information supplied by financial institutions.

That reasoning places responsibility primarily upon the institution supplying information to the credit bureau.

The bank could not first invoke its reporting obligation and then shift accuracy responsibility entirely onto Metropol.

The judgement therefore rejected the argument that Metropol’s separate legal status shielded the bank.

KSh200,000 Claim

The bank further challenged Miano’s KSh200,000 general damages award as unsupported by evidence.

Miano had claimed that the listing prevented him from securing credit and purchasing land.

However, the High Court found insufficient evidence establishing the alleged land loss or anticipated financial returns.

The court also found no adequate proof linking the failed transaction directly to the CRB listing.

Yet Justice Sergon drew an important distinction between specific financial losses and impaired credit standing.

A borrower may suffer embarrassment and damaged creditworthiness without proving precisely quantified financial losses.

The judge therefore found an actionable wrong sufficient to justify general damages.

He held that KSh200,000 was not excessive and fell within comparable High Court awards.

Importantly, the award compensated for credit-related injury rather than the unproved land transaction.

It covered the inconvenience, embarrassment, and impairment caused by the adverse credit listing.

The bank had also argued that Miano should first exhaust the CRB dispute-resolution mechanism.

Justice Sergon acknowledged that statutory dispute procedures ordinarily deserve consideration before court proceedings.

However, he said the exhaustion doctrine could not operate mechanically in every circumstance.

Miano had complained to the bank and demanded correction after discovering the adverse listing.

The bank acknowledged the complaint and indicated that it would investigate the disputed information.

The court therefore found no basis for declaring Miano’s lawsuit premature or incompetent.

The High Court ultimately rejected all six grounds advanced by Bank of Africa.

Justice Sergon found no reason to disturb the magistrate’s judgement, damages, or costs award.

He also ordered the bank to bear the costs arising from the unsuccessful appeal.

His central conclusion carried a broader warning for Kenya’s lending industry.

“A statutory obligation must be exercised within the confines of the statute,” the judge stated.

The existence of reporting powers, he added, does not remove conditions governing their lawful exercise.

The judgement, therefore, does not prevent banks from reporting genuine loan defaults to credit bureaus.

Instead, it makes clear that reporting must satisfy accuracy, notice, and procedural requirements.

READ ALSO: How to clear from CRB

For borrowers, the ruling underscores the importance of challenging questionable listings before their consequences deepen.

For lenders, it offers an equally important lesson about documenting every step preceding negative reporting.

A genuine arrears position does not automatically make an adverse CRB listing lawful.

The institution supplying the information must still demonstrate that statutory safeguards were properly observed.

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