Hyderabad: A district consumer commission in Hyderabad has directed LIC Housing Finance to pay Rs 2.2 lakh as compensation to a consumer for failing to communicate the removal of his name as a co-applicant on a home loan to CIBIL, resulting in his name continuing to appear in the credit bureau’s records for several years.The complainant, Veera Narender Reddy Y, submitted that his former wife had obtained a housing loan of Rs 31 lakh from LIC Housing Finance and he was added as a co-applicant. He said that after they got divorced in March 2016, he submitted a copy of the divorce decree and requested the company to remove his name as co-applicant. As required by the company, his former wife also gave her consent for the removal.He alleged that the company had failed to inform CIBIL about the change, because of which his name continued to appear in its records. He further claimed that multiple applications for home loans with different banks were rejected citing the same reason.Claiming that the company’s failure to update his CIBIL records despite repeated requests had caused him mental agony, financial loss and humiliation, he approached the consumer commission.LIC Housing Finance, in its written version, submitted that it had removed his name from the loan account in Jan 2017 and that the loan account itself was closed on Oct 17, 2017. It contended that discrepancies in his CIBIL score were not within its purview. The company also said that soon after the complainant brought the issue to its notice, it had informed CIBIL to verify and rectify the records.The commission observed that merely removing the co-applicant’s name from internal records did not discharge the company’s legal obligation.“The opposite party is statutorily required to communicate the revised loan status and transmit the updated data/information to CIBIL, and failure to update CIBIL records not only results in erroneous information but also adversely impacts the credit score/worthiness,” the bench observed, holding the company deficient in service and in violation of its statutory obligation.However, the commission said the complainant had not produced sufficient documentary evidence to establish that the incorrect CIBIL entry was the reason for rejection of his loan applications or that he had suffered quantifiable financial loss as a result.It held that he was entitled to compensation for the anxiety, inconvenience and mental agony caused by the continued reflection of his name as a co-applicant in the CIBIL report between 2019 and 2025.Along with compensation, the commission also directed LIC Housing Finance to pay Rs 25,000 towards litigation costs.
