Wednesday, 13 Mar 2024
CTOS Digital Bhd group chief executive officer Eric Hamburger.
PETALING JAYA: CTOS Digital Bhd
follows a rigorous process of validating the information it provides in its credit reports, credit scores and other analytical products, says group chief executive Erick Hamburger.
He said the credit reporting is a highly regulated industry, in which CTOS is audited annually by the Registrar of Credit Reporting Agencies (Registrar) under the Finance Ministry.
CTOS is allowed to provide credit scores to companies, he told an online media briefing while emphasising that the recent court ruling against the agency would not impede its operations.
Hamburger was responding to a recent court case involving businesswoman Suriati Mohd Yusuf who had sued the agency for alleged “inaccurate credit rating”.
The credit reporting agency clarified that it has the licence to provide credit scoring services, under the Credit Reporting Agencies Act (CRAA) 2010.
It was reported that High Court judge Datuk Akhtar Tahir had ruled that the group’s subsidiary CTOS Data System Sdn Bhd had overstepped its statutory functions under the CRAA 2010 in formulating a credit score for Suriati.
Hamburger said: “It is under the purview of the CRAA that we are allowed to provide credit scores, and the role that agencies like ours play is providing sufficient insight data and analytics for companies to make financial decisions.”
While acknowledging the defamatory nature of the case, he pointed out that CTOS had never lost a defamation case after having won all 12 similar suits in the past.He said CTOS had recently won another lawsuit and the plaintiff was in the process of filing an appeal.
There are five current defamation cases involving the company, according to Hamburger.
“We go through the process with the Registrar to ensure that when there is a complaint, we have sufficient adherence to protocols and procedures to address these issues, validate our information and confirm to the party making the claim that we have the necessary documentation and it is accurate,” he said.
CTOS is confident that the credit agency would be able to win its appeal against the High Court’s decision, which had ordered it to pay Suriati RM200,000 in damages.
Hamburger said CTOS would continue to operate as usual.
Responding to a question as to whether there is an acceptable statistical margin of error in its analysis, Hamburger said the credit agency is fully dependent on data in its operations, and if the data is demonstrably reliable and true, it will be incorporated in its reports.
“For example, in this case for which we are filing an appeal, we have validated and provided adequate evidence that the plaintiff did have an outstanding debt with a telecommunications provider, which we have also made known to the plaintiff herself,” he said.
The painstaking process that CTOS takes, he said, had been helpful although the agency did receive similar complaints on several occasions.
Hamburger reiterated CTOS’s role as a credit score provider, particularly in the three crucial areas of improving financial literacy, and helping to strengthen credit risk management for lenders.
At the same time the agency would also be striving to assist small-medium enterprises (SMEs) and micro SMEs in their pursuit to access credit facilities.
While explaining that he was not unduly worried about the company’s business, Hamburger acknowledged the concerns about its share price, which dipped 20 sen from its RM1.45 close on Monday following the court ruling.
This represented a 13.8% fall.
“We are not perturbed about our business but we felt we needed everyone to be aware of what this case is really about, judging from the exposure in the media that it had received,” he said.
He pointed out that it is has always been essential and a practice to ensure accuracy and transparency in its rating and reports.
The agency will also ensure the value of the service that it provides to companies and the public, according to Hamburger.
Separately, CTOS announced, through a filing with Bursa Malaysia, that Mauritius-based private equity firm Creador VLP had acquired an additional three million shares in the credit agency through Jade Vine Sdn Bhd, bringing its stake to 451.3 million shares or 19.5%.
CTOS , CreditReporting , DataValidation , FinancialLiteracy , CreditScoreAccuracy , DefamationLawsuit
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