Banks, financial institutions and service providers have now found a novel method of recovering debts from customers. In cases where the harassment of debt collectors alone is not sufficient, these institutions have resorted to the blacklisting and blackmailing of debtors on lists compiled by credit reference companies.

One such company is ‘Credit Tip-Off Services Sdh. Bhd.’, or more commonly known as Ctos. Being a private company dealing with the collation and dissemination of information, they provide banks and other businesses with information on the financial background and repayment history of the public.

Names of individuals and companies which appear in the public domain are compiled along with information regarding delayed installment payments, unsettled bills, summonses from the police or local authority, bankruptcies, civil suits, winding-up of companies, proclamations of sale and re-directorship.

Banks rely on this information to assess customers prior to approving loans, credit cards, hire purchase facilities and other credit leasing services.

Although banks acclaim the Ctos list to be a reliable source of reference, it has received much condemnation for using unjustifiable means of blacklisting consumers. The Ctos list is based merely on information gathered from public avenues, which financial institutions use without first verifying its accuracy.

How often the Ctos list is updated is not known, yet it is undeniable that the data it contains may not be current as the credit status of defaulters who have already settled debts are not made available publicly.

Why are consumers left with the inconvenience of contacting Ctos to check on or update their records when such records were in the first place compiled against their will?

Credit reference companies such as Ctos deny individuals their rights to ascertain confidentiality over personal particulars. Solely for the purpose of company profits and gains, personal information on consumers are probed into, and their privacy exploited by making available such information to any willing buyer without first seeking their consent.

Credit grantors on the other hand, do not only employ services of debt collectors to harass debtors into paying up, but are taking advantage of the Ctos list in a bid to blackmail the public.

Debtors are threatened of being blacklisted if debts are not settled. The public have been known to fear the Ctos list as names that appear on it remain there for life.

Although records can be constantly updated, their financial history still remains a part of the archive.

CAP urges the finance ministry to look into the activities of Ctos and similar credit reference companies to ensure that their practices do not violate basic consumer protection and rights of confidentiality.

Banks on the other hand should be discouraged from depending solely on information provided by these companies, especially when such information has not been verified true and it violates the privacy of individuals.

Banks, financial institutions and service providers should recover debts through the existing judicial system as stated under the Debtors Act 1957.

Blacklisting debtors and employing debt collectors to harass them into paying up is not only unfair and unjust, but it is a farce of the Malaysian judicial system.

The writer is president, Consumers’ Association of Penang.