Credit Bank has been ordered to pay Sh1.7 million in compensation to a merchant and non-customer who was wrongly listed as a loan defaulter in a bizarre stolen identity case four years ago.
High Court Judge Lawrence Ntheja Mugambi said the bank violated Paul Mosambi Mwatu’s human dignity and integrity by falsely listing him as a defaulter on the loan.
“It was ordered that the respondent (Credit Bank) compensate the petitioner in the sum of Shs 1,700,000 for the violation of his rights under Article 28 relating to human dignity through injury to his inherent dignity and integrity as a person by causing him to be subjected to the violation,” the judge said. However, he is in default on the loan and continues to do so in the full awareness that this is not factually true.”
Mwatu’s troubles began on September 10, 2025, when he approached a major bank for a Sh2 million loan to expand his business. His application was rejected because he was listed as a defaulter by Transunion Credit Reference Bureau Africa Limited on the instructions of the credit bank.
The merchant was shocked by this development as he was not an account holder in the Credit Bank and had not taken any loan from any lender as he claimed.
Mr Mwatu visited Transunion Credit Reference Bureau Africa Limited on 17 September 2015 to inquire about the matter and was informed that a bank account had been opened in his name at Credit Bank.
The dealer was also told that a Sh6.4 million loan was issued in his name to purchase a truck that was jointly registered in his name and the credit bank. In addition, a check book was issued to the person who claimed to be Mr Mwato by the bank.
Armed with this information, the trader went to the Credit Bank branch in Nairobi Industrial Area to ascertain how the account was opened and by whom. A comprehensive examination of the photo of the person who opened the impugned account at the Credit Bank revealed a strange case of identity theft.
Mr Mwatu positively identified the man in the identity theft racket, stating that he was known to him personally and that he had unsuccessfully approached him to be one of the guarantors for a loan from a local bank.
“Although the petitioner initially agreed to the application, he later changed his mind. He had at that stage already issued to the relevant third party a copy of his identity card which the third party subsequently used to fraudulently open the disputed account with the respondent.” .
After confirming these facts, the Credit Bank reported the matter to the Bank Fraud Investigation Unit, and the fraudster was arrested and charged with the crime in 2015. Following this, the bank sold the truck that had been purchased through the fraud scheme to recover its money.
However, the credit bank failed to remove Mr Moatu’s name from the credit blacklist despite requests via email on 25 March 2022 and a physical letter dated 22 March 2025.
Judge Mugambi rebuked the bank for not taking any action and ordered Mwato’s name to be removed from the loan blacklist.