LUXEMBOURG (dpa-AFX) - Companies may not decide whether to conclude contracts with customers solely on the basis of an automated assessment of creditworthiness by Schufa. The so-called Schufa score is to be regarded as a fundamentally prohibited "automated decision in individual cases" if Schufa's customers assign it a decisive role in the granting of credit, the European Court of Justice ruled in Luxembourg on Thursday.
Banks, telecommunications services or energy suppliers usually ask private credit agencies such as Schufa about a person's creditworthiness. Schufa then provides an assessment, the so-called score value. This is intended to show how well the person concerned fulfills their payment obligations.
The background to the proceedings before the ECJ is a case from Germany. In one of them, a person who had been refused a loan asked Schufa to delete an entry and grant him access to the data. Schufa provided him with his score value and general information on the calculation, but not the exact calculation method.
The Wiesbaden Administrative Court referred the case to the ECJ in order to clarify the relationship with the General Data Protection Regulation (GDPR). The GDPR stipulates that decisions that have legal effect on people may not be made solely through the automated processing of data.
The judges in Luxembourg have now ruled that scoring falls under this and is only permitted under certain conditions. Schufa's customers are not allowed to give the score a decisive role in the granting of credit. The Wiesbaden Administrative Court must now decide whether the German Federal Data Protection Act contains a valid exception to this prohibition that is in line with the General Data Protection Regulation.
Schufa welcomed the ruling: it provides clarity on how scores may be used in the decision-making processes of companies in accordance with the GDPR. "The overwhelming feedback from our customers is that payment forecasts in the form of the Schufa score are important to them, but are generally not the only decisive factor in concluding a contract," Schufa announced after the ruling./rew/DP/mis