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Banking Case Study

Communication Gap Leads to Credit Rating Confusion

You are on: The Problem

From the Perspective of the Client

Our client applied for and received an RBC CreditLine for Small Business™, a credit card which he only used for business. Unfortunately, due to his bookkeeper’s error, the company missed several payments. When the client realized what had happened, he paid off the balance owing right away. Later, he found out that the credit bureau had lowered his personal credit rating. He complained because when he applied for the card, he had made a point of signing for it for his business only, and wasn’t aware that his personal credit rating could be affected.

From the Perspective of RBC®

Card Services advises that the CreditLine for Small Business application asks for information on both personal and business credit histories, and approves credit based on both. Therefore, if an account is in arrears, the credit bureau records that fact on both personal and business credit ratings.

You are on: The Resolution

The Office of the Ombudsman Reports:

"We saw a communication gap here. We looked at the original application and confirmed that the client had completed and signed it only on the company’s behalf. At this point, the bank should have gone back to him and explained that a personal commitment was also required for the card. Instead, they approved the application. We felt the fact that the card applies to both personal and business credit wasn't spelled out clearly enough in the literature, which lead to the misunderstanding about liability.

We recommended that the bank change all the relevant marketing literature and forms so the facts were clearly communicated. They agreed to restore the client's personal credit rating and change the literature."

You are on: What Can be Learned

For RBC:

Be crystal clear in all communications - from marketing brochures to forms to personal contact, make sure to clearly spell out all important information.

For Clients:

If forms are confusing or unclear, ask for an explanation. Solve any problems using the RBC step-by-step complaint resolution process.