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Being blacklisted
07/03/2006
The Star By BHAG SINGH
We live in an age where organisations are becoming bigger, transactions more
complex and dealings ever more impersonal. The reliance on procedures and
guidelines in the work flow has become greater.
Even though guidelines are in place to enable matters to proceed properly
there can be cause for unhappiness.
An example is where an organisation engages in an activity which involves
compiling a list of people who have been sued. In some countries it may be
called a “blacklist”.
Various commercial organisations involved in granting credit facilities may
subscribe to such a service to know who they should not do business with.
However, a problem arises when a person has being sued but the matter is
still pending, and he is unable to get a loan or other credit facilities
because his name is in such a “blacklist”.
To the victim, this can be very distressing when he finds his loan
application turned down. He may be told that he has been blacklisted.
Such a person is then likely to find himself feeling extremely aggrieved and
his anger is likely to turn to the organisation that provided the blacklist,
which will be referred to as the “blacklist provider”.
The grievance may be aggravated by the fact that the person, though he has
been sued, may not actually be liable. He may have a good defence. In the
end the court may find that there is no basis for a claim against him. But
it may take years before a decision is made. In the meantime he is
prejudiced.
Yet the “blacklist provider” may say that it merely sold information on
people who are being sued by financial institutions.
Such blacklist providers consider themselves as merely providers of
information from court records. They will say that apart from stating the
facts they make no further imputations and therefore they are not liable for
the refusal to grant credit or financial facilities.
Who then is to be blamed for the individual being denied the loan facilities
which would appear to be caused by the blacklist? Is it the “blacklist
provider” or the lender who is the cause?
Such a “blacklist provider” is doing what it does as a business activity
from which it profits. The activity would therefore appear to be unfair to a
person who is deprived of the loan facilities.
But a question that arises is whether such a blacklist provider is to be
viewed negatively because of the difficulty caused to certain members of the
public directly or indirectly. There is also a positive side to such
activities.
This is because such information can alert financial institutions about
potential clients who have defaulted before.
Here the matter takes a different complexion. Where a blacklist provider has
provided the list what is the proper thing for the recipient who subscribes
to the service to do?
Is the recipient to treat the information as a conclusive factor to turn
down the application for credit facilities?
Or should the information be treated merely as a form of alert? The
financial institution should then use it as a basis to conduct further
inquires to make a more informed decision.
These considerations are necessary because the blacklist contains very basic
information as to the court wherethe action was filed, the parties involved,
their particulars and perhaps the name of the solicitors involved.
The problem arises because the recipient of the blacklist sometimes relies
on its contents without examining the matter any further.
When this happens it would be quite legitimate to ask who is to blame, the
“blacklist provider” or “the recipient”? Obviously, the blacklist provider
is the source but the arrangement surely requires exercise of discretion by
the recipient.
The problem that arises can be said to be attributable to the non-exercise
of discretion by the recipient or its agents. This is because the
information in the blacklist is merely a tool.
The fact that discretion is sometime exercised and sometimes not exercised
becomes obvious when a person whose name is on the blacklist has his
application for a hire purchase facility turned down by one financial
institution but receives a credit card with a RM30,000 limit from another
institution on the same day.
The individual who is a victim will find little consolation in the legal
intricacies of the subject. At the same time it is also desirable that both
the recipient and provider of the blacklist understand the legal issues and
act in the manner which will be more humane. |
