Germany's leading credit bureau Schufa reportedly stores outdated data on millions of consumers for far longer than previously assumed, according to a media report. The company reportedly uses this sensitive data for internal tests and shares the results with corporate clients, broadcaster NDR and the Süddeutsche Zeitung (SZ) reported on Wednesday, citing a joint investigation. Those affected reportedly know nothing about it, and even experts in the field are said to be largely unaware of this "shadow database."
According to the report, the database primarily contains information that consumers had reason to believe had long since been deleted. This reportedly includes old loans and credit cards, wage garnishments and personal insolvencies, as well as debts that those affected often settled years ago. Schufa uses this data, among other things, to calculate how well newly developed credit scores perform.
Schufa plays such a significant role for many people because it assesses individual consumers' creditworthiness based on collected data. On this basis, companies can estimate the likelihood that someone will pay their bills. Banks, credit brokers, online retailers, and energy providers, among others, rely on these scores. The credit agency holds data on more than 68 million people.
The company considers the additional storage of historical data to be lawful, citing statutory provisions, according to the NDR and SZ report. Consumer advocates and legal experts reportedly see it differently: several experts told the two outlets that they were reminded of statutory deletion deadlines and the principle of data minimization enshrined in the General Data Protection Regulation (GDPR).
Critics reportedly take particular issue with the sharing of old scores with corporate clients, especially non-banks such as energy and telecommunications providers. Experts also reportedly criticize the fact that customers have so far had no way of knowing that this older data about them is being stored at all.
According to the report, Hesse's state data protection commissioner is now looking into the matter. The authority is currently examining, through a formal inquiry procedure, whether Schufa is required to inform consumers about this storage.
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