Credit Bank has been ordered to pay Sh1.7 million in compensation to a trader and non-customer it wrongly listed as a loan defaulter in a bizarre case of stolen identity four years ago.
High Court judge Lawrence Nthiga Mugambi said the bank had violated Paul Musambi Mwatu’s human dignity and integrity by falsely listing him as a loan defaulter.
“An order that the respondent (Credit Bank) shall compensate the petitioner to the tune of Sh1,700,000 for the violation of his rights under Article 28 on human dignity through injury caused to his inherent dignity and integrity as a person by causing him to be listed as a loan defaulter and persisting in doing so while fully aware that this is factually untrue,” the judge said.
Mr Mwatu’s woes began on September 10, 2025, when he approached a top bank for a Sh2 million loan to expand his business. His application was rejected because he had been listed as a defaulter by Transunion Credit Reference Bureau Africa Limited on the instructions of the Credit Bank.
The trader was shocked by this development because he was neither an account holder at Credit Bank nor had he taken out any loan with any lender as claimed.
Mr Mwatu visited Transunion Credit Reference Bureau Africa Limited’s office on September 17, 2015, to enquire about the matter and was told that there was a bank account that had been opened in his name at Credit Bank.
The trader was further told that a Sh6.4 million loan was issued in his name for the purchase a lorry that was jointly registered in his name and Credit Bank. Additionally, the person who claimed to be Mr Mwatu was issued with a cheque book by the bank.
Armed with this information, the trader proceeded to the Credit Bank branch in Nairobi’s Industrial Area to ascertain how the account was opened and by who. A cross-check of the photo of the person who opened the impugned account at Credit Bank revealed a bizarre case of stolen identity.
Mr Mwatu positively identified the man in the identity theft racket, noting that he was personally known to him and that he had unsuccessfully approached him to be one of the guarantors for a loan at a local bank.
“Although the petitioner had initially agreed to the request, he later changed his mind. He had at that point already issued the 3rd interested party with his copy of identity card that the 3rd interested party subsequently used to fraudulently open the disputed account with the respondent” court filings said.
Upon ascertaining these facts, Credit Bank reported the matter to the Banking Fraud Investigation Unit, and the fraudster was arrested and charged with the crime in 2015. Subsequently, the bank sold the lorry that had been purchased through the fraud scheme to recover its money.
Credit Bank, however, failed to have Mr Mwatu’s name expunged from the credit blacklist despite requests via email on March 25, 2022 and a physical letter dated March 22, 2025.
Justice Mugambi reprimanded the bank for inaction and ordered that Mr Mwatu’s name be deleted from the loan blacklist.
