Somewhat surprisingly, the credit agency Schufa announced a fairly far-reaching change. This refers to the storage period of data.
Only recently did the news hit the headlines that Schufa’s current actions could violate applicable EU law – TECHBOOK reported. Due to the ongoing legal proceedings, Schufa has now adjusted the storage period for data on private insolvencies.
Current proceedings before the ECJ
A case from Hesse provided the basis for the ongoing court proceedings. Someone there had sued against the Schufa score because, on the one hand, he was denied a loan because of the score. On the other hand, the Schufa neither granted access to the data nor agreed to a deletion. The lawsuit was ultimately successful before the Schleswig-Holstein Higher Regional Court.
In an opinion by the EU Advocate General, Priit Pikamäe, this violates EU law, especially the GDPR (General Data Protection Regulation). According to this, one should not be subject to significant restrictions based on an automatically calculated probability value – and that is exactly what the Schufa score is. In the case of the plaintiff, these are that he cannot take out a new loan, make a hire purchase and only rent an apartment or open a new bank account. All of these things usually require a high Schufa score.
On the topic: Did you know what the Schufa knows about you – and what not?
Judgment on the Schufa is still pending
This and another similar case are currently being heard before the ECJ, the European Court of Justice. Another procedure is also running before the Federal Court of Justice in Germany. The process in this country will, however, for the time being exposed, until a decision is made at European level. The ECJ is not bound by the opinion of the Advocate General. But often one follows his assessment.
Also the Schufa itself already commented on the procedure, which incidentally not only affects the German company, but also other European credit bureaus. The Schufa emphasized, among other things, that the Attorney General had nothing to complain about in the process itself. It would primarily be about the transmission of the score, on the basis of which decisions would then be made. The ECJ will probably only give its judgment in the summer.
Schufa reduces the storage period in the event of personal bankruptcy
In his report, Pikamäe complains that the Schufa score provides much longer information about a possible discharge of residual debt than the publicly accessible register does. The debtor can apply for this so-called discharge of residual debt after the conclusion of insolvency proceedings. As the name suggests, this sometimes eliminates part of the debt if certain conditions are met. Among other things, the debtor must go through a so-called “good conduct period”, which lasts a maximum of six years. The procedure should ultimately enable those affected to make a new economic start.
In Germany, the corresponding data can only be viewed six months after the end of the procedure. However, they have been deposited with the Schufa for a total of three years. In the course of the current procedure, however, Schufa has now announced that it will also reduce its period to six months. The statement also says: “Of course, we will adapt our processes and services to the requirements of the ECJ as soon as possible after a corresponding ruling.”
Sources
- Schufa “On our own behalf: SCHUFA comments on ECJ proceedings”, accessed on March 29, 2023)
- Federal Court of Justice (“Suspension of the proceedings in VI ZR 225/21 (deletion of the entry on the granting of the discharge of residual debt in the insolvency proceedings in a Schufa database)”, accessed on March 29, 2023)
- hot (“Schufa shortens the storage period for entries on private bankruptcies”, accessed on March 29, 2023)
- Lower Saxony state justice portal (“Insolvency Proceedings – The Residual Debt Relief Procedure”, accessed on March 29, 2023)