5 min readNew DelhiJul 22, 2026 01:39 PM IST
Holding Bajaj Finance liable for wrongly linking a police constable’s CIBIL record with another person’s defaulted loans, a Kerala District Consumer Commission found deficiency in service and directed the financier to correct the credit information, pay Rs 50,000 compensation for deficiency in service and mental agony.
A bench of president Meenakshi Sundaram and member R Vijaya also awarded Rs 25,000 litigation costs and directed the financier to ensure rectification through TransUnion CIBIL. CIBIL record is like a financial report card. It’s a three-digit summary of your credit history, rating how responsibly you handle borrowed money.
“Knowing fully well that there were differences between the complainant and the so-called other person, Bajaj Finance submitted the wrong data and, therefore, Bajaj Finance alone is held responsible for submitting the wrong data,” the commission said on June 25.
The order added that TransUnion CIBIL is in no way responsible, as held in the judgments and for the reasons stated in the various decisions of the commission.
Stolen identity, damaged credit
The complainant, a constable in the Tamil Nadu Police Department, purchased a Haier washing machine from Darling Digital World on February 24, 2022, paying the full amount of Rs 29,900 through his debit card. During the purchase, he submitted copies of his PAN card, Aadhaar card, Voter ID, and bank passbook only to complete the purchase formalities.
In March 2025, when he applied for a personal loan from the State Bank of India, his application was rejected because his CIBIL score had dropped to 627. On inquiry, he discovered that two loans had been fraudulently obtained in his name through Bajaj Finance in connection with purchases made by another person, who later defaulted on repayment. The resulting defaults were reflected in the complainant’s credit report, adversely affecting his creditworthiness.
Despite approaching the retailer and Bajaj Finance for clarification and issuing a legal notice, the complainant received no satisfactory response or corrective action. He therefore filed a consumer complaint seeking compensation for mental agony and financial loss, as well as correction of his CIBIL records.
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CIBIL claims no consumer relationship
The TransUnion CIBIL Limiter denied all the allegations made in the complaint, except those that are specifically admitted herein, and states that the remaining allegations are to be proved by the complainant. It is further contended that there is no privity of contract between the complainant and theTransUnion CIBIL, the complainant is not a consumer of the TransUnion CIBIL under the Consumer Protection Act, 2019, and no cause of action has arisen against it.
It was submitted that the company functions only as a credit information company and repository of credit information received from member banks and financial institutions, and neither creates nor independently verifies the information reported to it.
It was further stated that the CIBIL Score is an automated statistical representation generated based on credit information periodically reported by credit institutions and that the company plays no role in sanctioning loans, classifying borrowers as defaulters, or determining the complainant’s eligibility for loans.
The retailer Darling Digital World, Bajaj Finance, and E Manikandan did not appear before the commission or file their written versions despite several opportunities. Consequently, they were proceeded against ex parte.
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Bajaj Finance solely liable: Order
The commission found that the complainant had paid the full purchase price for the washing machine through his debit card and had never availed any loan from Bajaj Finance. Yet, two loan accounts appeared in his CIBIL report, adversely affecting his credit score.
The commission compared the complainant’s KYC details with those of the borrower and found clear differences in their names, dates of birth, Aadhaar numbers, voter IDs, phone numbers, and addresses. It observed that Bajaj Finance had reported incorrect credit information to TransUnion CIBIL without properly verifying the borrower’s identity, even though the KYC details did not match.
The commission held that TransUnion CIBIL merely acts as a repository of information supplied by member financial institutions and cannot independently alter or verify credit data without certification from the reporting institution under the Credit Information Companies (Regulation) Act, 2005. Relying on decisions of the Karnataka State Consumer Commission and the Chandigarh State Consumer Commission, the commission observed that liability for inaccurate credit information rests with the reporting financial institution, not with CIBIL, which only reflects the data provided by its members.
Accordingly, the commission concluded that Bajaj Finance alone was guilty of deficiency in service for submitting incorrect credit information, while no deficiency in service was established against the retailer, the alleged borrower, or TransUnion CIBIL.
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Takeaway
This judgment reinforces that banks and financial institutions must thoroughly verify borrower identities before reporting credit information. It also clarifies that credit bureaus like TransUnion CIBIL cannot be held liable for inaccurate data supplied by member institutions. The ruling strengthens consumer protection by ensuring accountability for erroneous credit reporting that harms borrowers’ financial reputation.
Consumers facing similar grievances may contact the consumer helpline in their respective states (Tamil Nadu: 044-25340050) or dial the National Consumer Helpline at 1915 for assistance.
