Schufa shortens the storage period after personal bankruptcy

Im Dispute about the deletion of a Schufa entry after a personal bankruptcy Federal Court of Justice (BGH) in Karlsruhe on Tuesday announced no decision. The sixth civil senate responsible for data protection issues suspended the proceedings and wants to wait for a signal from Luxembourg. The European Court of Justice (ECJ) will make judgments in two similar cases in the coming months that could have far-reaching consequences for the credit agency (Az. VI ZR 225/21).

The Schufa reacted immediately. Against the background of the ongoing proceedings, the company announced that it would reduce the storage period for the discharge of residual debt from three years to six months with immediate effect. “With our decision, we are creating clarity and certainty for consumers. In this way, we enable those who are freed of residual debt to have a quick economic restart,” said Ole Schröder, responsible for the legal department on the Schufa board, on Tuesday morning in Wiesbaden. Consumers do not have to take action themselves: According to Schufa, the deletion is automatic and should take place within the next four weeks.

However, the credit agency made it clear in a statement that the shorter storage period for the discharge of residual debt would not change their business model. The number of people affected, around 250,000, has no fundamental impact on the Schufa score procedure and its validity.

In the legal dispute that has now been suspended, a North German consumer wants Schufa to delete information about his private bankruptcy earlier than has been the case up to now. Consumer bankruptcies can also be ended with residual debts. The information about the so-called residual debt exemption can be viewed for six months in the official online portal; However, the Schufa and other credit bureaus store this data for three years. The courts have long been concerned with whether this is permissible in view of the EU General Data Protection Regulation (GDPR), which has been in force since 2018.

It was not until mid-March that an expert on ECJ criticizes that the scoring and the previous practice of longer storage of the entries for the remaining bond violate EU data protection law. The judges in Luxembourg usually follow the recommendations of the Advocate General.