A federal court judge has set a precedent by ordering TransUnion of Canada Inc. to pay $5,000 in damages to a Calgary man who was turned down by a bank after another man’s credit history was wrongly forwarded.
Federal Court Justice Russel Zinn ruled that on the basis of the privacy breach and repeated failures by the credit rating agency, TransUnion of Canada to correct the “grossly inaccurate” information quickly and effectively a payback to the victim is warranted, along with an award of $1,000 in legal costs.
Mirza Nammo represented himself in court and persuaded Justice Zinn to make the first ever damage award for a breach of the federal privacy act, the Personal Information Protection and Electronic Documents Act (PIPEDA).
Justice Zinn compared the dissemination of false credit information to a strip search in that it lays “bare to those receiving the information the creditworthiness of a person” and therefore can be “equally intrusive, embarrassing and humiliating as a brief a respectful strip search”. Zinn also elaborated that in this case, while the act was “serious,” it was “relatively brief and not extremely disrespectful” and therefore warrants “moderate” damages.
The situation started when Nammo went to the Royal Bank of Canada (RBC) for a loan to help start a trucking business with a partner. The next day RBC advised him that his loan was not approved “because he had ‘bad credit’ and his partner did not have a financial background sufficient to support a loan of the necessary amount on his own credit.”
It didn’t take long for Nammo to discover that TransUnion had provided RBC with information that came from a collection agency and was related to a man with a different name and date of birth and who had never lived at any of the same addresses Nammo had lived at. We’re not talking about a minor difference either, Nammo is 44 and the other person is 28.
Although the collection agency denied passing on the information related to Nammo, it was a bureaucratic mess to correct the record. So much so that Zinn found that overall TransUnion “failed to collect accurate information” on Nammo, failed to correct the erro and failed to take responsibility to begin with.
In the end Nammo won the day with the judge saying that the credit rating agency’s attempts to lay blame on Nammo during arguments in court was “offensive”.
This ruling could set the stage for many more lawsuits against not just banks, but any bureaucratic organization whose employees are negligent in their diligence or in listening to common sense. With more cases like this it will eventually cause corporations to implement some common sense within their organizations rather than blind policies and procedures. This is a subject that is covered in ‘The Banker Who Saved His Soul’.