In the case of private bankruptcy: Schufa shortens the duration of data storage

Status: 03/28/2023 11:29 am

After the conclusion of a private insolvency, the data of those affected will only be stored by the credit agency Schufa for six months. The Schufa is reacting to an upcoming judgment of the ECJ.

Schufa, Germany’s most important credit reporting agency for financial data, had already changed its practice before the court decisions were to be made. Effective immediately, it shortens the storage period for entries on completed private bankruptcies from three years to six months.

The Schufa announced today. This is intended to create clarity and security for consumers, a spokeswoman told dpa. The technical implementation will take a few weeks.

BGH is waiting for ECJ

The decision of the credit agency could anticipate several upcoming court decisions. This morning, the Federal Court of Justice (BGH) announced that it was suspending proceedings on the issue for the time being in order to await a decision by the European Court of Justice (ECJ) in two similar cases.

The BGH is hearing the case of a former self-employed person from northern Germany who is in dispute with the credit agency. (Ref. VI ZR 225/21). He had to file for bankruptcy in 2013. Consumer bankruptcy allows private individuals to free themselves from their debts, even if they cannot repay everything. At the end there is the so-called residual debt exemption. Information about this will be published on an official internet portal for six months. In the case of the plaintiff, the discharge of residual debt was granted in 2019 and entered in the nationwide insolvency portal.

Data storage longer than in the public register

The Schufa retrieved the data and saved it. According to him, the man did not get a rental apartment because of this. He requested that the Schufa should delete his data. However, they refused and referred to the rules of conduct for credit agencies. After that, such data is stored for three years and then automatically deleted, so it is available at the Schufa for significantly longer than in the public register.

The complaint of the person concerned against the Schufa ended up in the highest German court, the BGH. But he now wants to check whether a legal regulation specifically for credit agencies is necessary at all. Because the EU General Data Protection Regulation has been in force since May 2018, and there is no such regulation. The BGH has therefore already submitted questions to the ECJ about the interpretation of European law.

Although the judgment of the European Court of Justice in Luxembourg has not yet been made, the signals from there indicate that longer storage periods at credit bureaus will probably soon be a thing of the past. Almost two weeks ago, the responsible Advocate General at the ECJ presented his legal opinion. He doubted that Schufa was allowed to store data on discharges of residual debt after insolvency longer than the public register. The European judges do not have to adhere to this opinion when making their decision, but they often use it as a guide.

Also Schufa scoring before the end?

The Schufa could soon face further trouble from the highest European court. Because the creation of so-called score values ​​for creditworthiness by Schufa also violates European law, according to an expert at the ECJ. A verdict is expected in a few months. Private credit agencies such as Schufa are often used by banks, telecommunications services or energy suppliers to obtain an assessment of a person’s creditworthiness. The score is intended to show how well the person is meeting their payment obligations.

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