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Schufa logo: In the future, the zip code will no longer determine whether someone is considered solvent
Photo: Andreas Arnold / picture alliance / dpa
The Federal Cabinet has decided on new rules for determining the assessment of solvency. A reform of the Federal Data Protection Act is intended to strengthen the rights of consumers against credit reporting agencies such as Schufa.
With the corresponding draft law, the federal government is reacting to a ruling by the European Court of Justice (ECJ). The highest European court had ruled that checking consumers' creditworthiness was only permitted within narrow limits. Previously, banks and companies could only decide on a customer's creditworthiness based on the Schufa rating. The ECJ had largely overturned this practice - and demanded a broader view. According to the European General Data Protection Regulation, EU member states are allowed to create their own legal basis for the scoring rules.
The data that, according to the federal government's draft law, may not be used in the future so that companies can assess a person's ability and willingness to pay includes, among other things, the home address, name or personal data from the use of social networks. Information about incoming and outgoing payments to and from bank accounts is therefore taboo, as is biometric data, health data or information about ethnic origin.
Facilitation for research purposes
“The new scoring regulation, which strengthens their rights, is important for consumers,” said Federal Interior Minister Nancy Faeser. "We clearly regulate that data on ethnic origin, health data or personal information from social networks as well as the home address must not play a role in the automated calculation of a person's ability to pay," said the SPD politician.
Schufa evaluates the creditworthiness of individual consumers based on collected data. Based on the Schufa value, companies can estimate the likelihood of whether someone will pay their bills. Banks, credit brokers, online retailers and, for example, energy suppliers use it. Read here: What the Schufa ruling means for consumers.
The background to the ECJ decision in December were two cases from Germany. In one case, a woman sued who had been denied a loan. She asked Schufa to delete an entry and grant access to the data. Schufa then only provided the score value and general information about the calculation, but not the exact calculation method. Schufa information also often plays a role in assessing the solvency of prospective tenants.
Federal Consumer Protection Minister Steffi Lemke said: “In the future, consumers will have to find out straight away which data and categories of data affected their score, how they were weighted and what significance the score has.” Also possible discrimination through scoring We should now put a stop to it, said the Green politician. The planned law still has to pass the Bundestag and the Bundesrat.
The reform of the Federal Data Protection Act is intended to make research projects easier. According to the Ministry of the Interior, companies and institutions that process data for historical, scientific or statistical purposes will in future only have to contact one supervisory authority as a contact person for cross-border projects for which there is a shared data protection responsibility.
apr/dpa/AFP