Data storage: the court sees Schufa entry critically after discharge of residual debt

The controversial storage of data at the Schufa after the conclusion of insolvency proceedings ends up before the European Court of Justice.

According to its own statements, the Wiesbaden Administrative Court submitted several questions to the ECJ on Tuesday for clarification.

The sixth chamber would like to know whether the storage of credit agencies such as Schufa is even permissible under data protection law and, if so, for how long.

It is about the question of whether information from the publications of the insolvency courts can be transferred one-to-one into privately managed directories without a specific reason for data storage by the private credit agency.

"This ultimately leads to data retention, especially if the data in the national register has already been deleted because the storage period has expired," the court explained.

Doubts as to whether “parallel storage” of the data is permissible

The exemption from the remaining debts must be deleted from the public register of bankruptcy notices after six months.

In the case of private credit agencies such as Schufa, on the other hand, the data can be stored for another three years and processed for information.

The court has doubts whether a “parallel storage” of this data in addition to state registers is even permissible for private companies.

If this is the case, the same storage and deletion periods would have to apply as in the public registers, emphasized the court.

The order for reference (Ref .: 6 K 226 / 21.WI) is final.

The background is the request of a private person to delete the entry of a residual debt discharge from the Schufa directory.

The plaintiff had previously failed at the Hessian data protection officer.

Consumers and entrepreneurial or formerly entrepreneurial individuals have been freed of their remaining debts in the event of bankruptcy since October 1, 2020 after three years instead of the previously largely usual six years.

However, consumer advocates criticize the fact that credit agencies store data for too long in their view.

Credit bureaus collect, among other things, personal data from consumers in order to assess their creditworthiness.

This data is important for financial institutions, online shops or mobile phone providers, for example to check the customer's creditworthiness before signing a contract.