The head of the data protection authority of the German State of Schleswig Holstein has threatened to fine SCHUFA and has asked banks and other users of consumer credit information to boycott SCHUFA’s services.  The reason for this unusual action against a credit information company is that SCHUFA refuses to disclose the algorithm used in credit scoring of consumers and therefore is not in compliance with the new data protection law which went into effect April 1st, 2010.  New law contains specific rules concerning transparency in credit scoring.  The head of the data protection authority believes that SCHUFA uses criteria such as age and gender as part of the basis for the score which is discriminatory.

According to BIIA’s German partner PASSWORD, SCHUFA has issued a formal denial stating that it has provided the necessary transparency to the local data protection authority with the proviso not to pass on the scoring algorithm to third parties.  BIIA’s editor contacted SCHUFA with a request for further information, but SCHUFA did not respond.   Source:  PASSWORD Germany

BIIA Newsletter Sept. I – 2010 Issue