New trends of personal data protection in credit relations while transferring debt information to the third parties.
Seeking protection of personal data was and remains one of the most widespread arguments of the borrowers – individuals, who consider the transfer of debt-related information to debt collectors to be devoid of substance. The recent court practice evidences that challenging the transfer of personal data transfer to the third party by the borrowers may be successful even without applying the Personal Data Protection Law. Furthermore, bank's actions concerning such transfer of personal data may be qualified as unfair business practice.
Specifically, at the end of July, this year the Court of Appeal upheld the ruling of the first instance court and declared illegal the transfer of personal data of the Borrower (defendant) to the debt collector by the Bank (respondent). In particular, the Bank transferred the data on address and debt of the Borrower. The courts confirmed the fact of breach of bank secrecy and consumer protection laws by the Bank. On this basis the Bank's actions were qualified as unfair business practice.
The courts rejected assertions of the Bank that the consent on personal data transfer was granted by the Borrower under the document called "General Credit Terms" (SK: stipulates the right of the Bank to transfer information about the Borrower, terms of the agreement, debt status, etc. to the third parties). The courts found no reason to believe that "General Credit Terms" is a part of the credit agreement.
Moreover, the court ruled on reimbursement of moral damages incurred by the Borrower and caused by the Bank. The courts came to conclusion that the debt recovery activity of debt collectors attracted by the Bank (SK: quantity and content of the messages sent to the Borrower) should be qualified also as unfair business practice.
The above proves for the banks to pay more attention to compliance with the bank secrecy and consumer protection laws while transferring personal data of the borrowers to the relevant third parties involved in debt recovery. Finally, it may be necessary to restate the internal policies and contractual relations between the banks and borrowers to ensure obtaining proper consent on transferring personal data to third parties from the borrowers.
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