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Schufa Faces Class-Action Lawsuit Over Historical Data Storage
🇩🇪 Germany /Crime & Justice

Schufa Faces Class-Action Lawsuit Over Historical Data Storage

From Die Zeit · () German

Translated from German, summarized and contextualized by DistantNews.

At a glance

News Named sources Under investigation
  • The European data protection organization NOYB has formally warned Schufa, a German credit bureau, over its storage of historical financial data and is preparing a class-action lawsuit.
  • Schufa is accused of retaining data on old loans, bankruptcies, and defaults for up to ten years, beyond regulatory deletion periods.
  • Critics claim Schufa has also withheld this historical data from consumers during formal information requests, potentially leading to massive financial consequences if the lawsuit succeeds.

Germany's credit bureau, Schufa, faces a potentially significant legal battle over its controversial "shadow database" of historical financial information. The European data protection organization NOYB ("None of Your Business") has issued a formal warning and announced preparations for a class-action lawsuit concerning the company's data retention practices.

At the heart of the dispute are revelations by NDR and "Süddeutscher Zeitung" in mid-July. They reported that Schufa maintains "historical data", information about old loans, foreclosures, and even personal bankruptcies that consumers may have settled years ago. Data protection regulations and industry self-imposed deletion timelines dictate that such data should be erased after a specific period. However, Schufa admits to storing this information for up to ten years.

We are now formally warning Schufa and demanding that it immediately delete the historical data

— Marco BlocherNOYB spokesperson explaining the organization's immediate demands to the credit bureau.

Privacy advocates are particularly concerned that Schufa allegedly concealed this archived data from individuals who made formal information requests under Article 15 of the General Data Protection Regulation (GDPR). Schufa defends its practice, stating that consumers are primarily interested in their current credit score and relevant factors, thus historical data is not typically disclosed. NOYB, however, demands an immediate cessation of this practice and is preparing a lawsuit in the collective interest of consumers.

If NOYB prevails in court, the financial repercussions for Schufa could be immense. Given that Schufa holds data on nearly all of Germany's 68-69 million adults, even a small compensation per person could result in astronomical total claims. Schufa maintains that its data processing is lawful and necessary, aligning with legal and regulatory requirements, but NOYB's legal action signals a major challenge to its operations.

Consumers are essentially interested in their current score and the currently influencing values, which is why we do not provide information about historical holdings.

— Schufa spokespersonExplaining the company's rationale for not disclosing historical financial data during consumer information requests.
DistantNews Editorial

Originally published by Die Zeit in German. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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