The credit agency Schufa does not have to delete data about consumer payment defaults immediately after the invoice has been paid. The Federal Court of Justice (BGH) in Karlsruhe upheld Schufa’s appeal against a ruling by the Cologne Higher Regional Court. The information file had advocated three-year storage, as is currently the case.
“Data on payment disruptions” collected by private credit reporting agencies “through registrations of their contractual partners” are not subject to the deletion period for public registers, writes the BGH about its judgment. Unlike data stored in the public register of debtors, they do not have to be “deleted immediately upon proof of settlement of the claim in question”.
According to their own statements, the judges also made a “distinction from a case decided by the Court of Justice of the European Union regarding the transfer of data from a public register”. In December 2023, the European Court of Justice (ECJ) in Luxembourg ruled that private credit agencies are not allowed to store certain data longer than the public insolvency register.
Included However, it was about the discharge of remaining debts after personal bankruptcy, not about settled payment problems. According to its own information, Schufa also implemented these deadlines. However, Schufa does not access public data from the debtor register in its scoring; rather, its contractual partners report information to it about creditors, the amount and content of the claims, the court ruled.
Late payment lawsuit
The Cologne court must now make a new decision on the specific lawsuit brought by a former debtor. Despite reminders, he had only paid the claims after a long time, but sued against the long-term storage of his data. He saw this as a violation of the General Data Protection Regulation (GDPR). The Schufa had saved three claims against the plaintiff for several yearswhich is why it classified the risk of non-payment as “very critical,” writes the BGH.
The Court specified that the specifics of the individual case must be taken into account. The rules for storage at private credit reporting agencies such as Schufa must “lead to an appropriate balance of interests and the specifics of the individual case must be sufficiently taken into account when weighing up the interests in question”.
The BGH sees the previous rules, which were approved by the Hessian data protection officer as the Schufa supervisory authority, as guidelines. Accordingly, Schufa currently stores settled claims for up to three years. In individual cases, however, a shorter period may also be appropriate.
After the verdict, both sides appeared generally satisfied. “I hope, of course, that Schufa will delete the entries in accordance with the ruling in many of the cases that we also represent,” said the plaintiff’s lawyer. Schufa welcomed the BGH decision, but called for more extensive legal regulations. “In the interests of consumers, the economy and also to relieve the burden on the German courts, we need a reliable legal basis for all creditworthiness information and storage periods, as regulated in the Code of Conduct,” said a spokeswoman.
