Following the Schufa ruling, the German government has introduced stricter rules for credit scoring. It is a system used by institutions to assess a person´s creditworthness. Among other things, data such as health information can no longer be evaluated when it comes to credit scoring.
Reinforcing consumer rights
New rules have been enacted to protect solvency. The reform of the Federal Data Protection Act aims to safeguard consumer rights towards credit agencies. This measure is a reaction to the ruling of the European Court of Justice, which stated that creditworthness checks should only be permitted within certain limits. Until now, companies and banks were bound by the Schufa assessment when deciding on a customer´s creditworthiness. However, this practice has been significantly restricted. According to the European Data Protection Regulation, EU member states can design their own legal basis fot the principles of credit rating. According to the German government´s draft law, data that cannot be assessed is primarily the name, home address or other personal information from social networks. Information from bank accounts, biometric data and information on ethnic origin are also inadmissible.
Reasearch will be easier
Creditworthness is assesed by Schufa on the basis of collected data that is used by banks, online retailers or credit brokers. Companies Companies have then access to the information whether someone pay their bills. The decision of the Court of Justice of the European Union resulted from two law cases in Germany in which access to Schufa-information was requested (for example in the case of credit refusal), but the provision of transparent information was not implemented. General information on the calculation was provided, but without precise details of the calculation method.
A reform was necessary to prevent possible future discrimination through scoring and to make it easier for consumers to access the data they need. However, the law still has to be approved by the Bundestag and Bundesrat. It is intended to faciliate research projects. According to information from the Ministry of the Interior, companies and organizations that process data for historical, scientific or statistical purposes will only have to contact one supervisory authority in future.
Grau Rechtsanwälte PartGmbB advises audits and supports companies, also as an external data protection officer, in the area of data protection.
If you have any further questions, please contact our law firm on +49 (0) 40 180 364 020 or office@graulaw.eu.
