The credit agency Schufa has quietly buried its product Schufa Check Now and is reacting with it to severe criticism that had rammed into the company from many quarters. According to information from NDR, WDR and Süddeutscher Zeitung The product will be further developed, but will be given a new name and a fundamentally different orientation.
The product was originally designed for people who, for example, did not get a mobile phone contract due to poor creditworthiness. The Schufa wanted to offer them a second chance with Schufa Check Now, provided that the credit agency is allowed to browse through the account statements and derive a credit rating from them. In addition, consumers could tick the website so that Schufa could have saved the data collected and thus developed their own products. In the long term, some privacy advocates are concerned, a kind of super score could have arisen.
A first product test together with Telefonica was already running, but according to Schufa no data was saved. As NDR, WDR and Southgerman newspaper the plans and the first product test disclosed in a report, there was an outcry and much criticism for the plans of the credit agency. Data and consumer advocates warned urgently. Peter Schaar, Federal Data Protection Commissioner from 2003 to 2013, assumed at the time that people would get “really naked” if they gave Schufa permission to collect and save data. He even feared that personality profiles could be created to the detriment of consumers.
In fact, the possibilities of the Schufa would have been very far-reaching. At that time, the affiliated subsidiary showed 65 sub-categories on a slide that could be read from such an account, including electricity, gas, insurance, but also wellness, maintenance payments or “risk factors” such as gambling.
Now the Schufa is apparently rowing back, wanting a different name for the product and designing it fundamentally different. One of the main reasons for this step was the negative attitude and criticism of the state data protection officers, who were critical of the project from the start.
One change apparently affects the credit check process
On request, Schufa emphasized that the click route with Telefonica was just a first product test. The results of this test were that more clarity was desired as to who uses the information obtained and what consequences consenting to use the product could have. That and a longer-term use of data have been “tried out”. “We take all of these points into account for a final product,” says Schufa.
In the future, the Schufa is apparently planning to continue reading the accounts of consumers through its subsidiary Finapi and reading the creditworthiness from them. However, this is common in the industry.
Contrary to what was originally planned, the entire process and the data are now to remain with Finapi, a Munich start-up that Schufa bought some time ago. With this, the Schufa is responding to one of the most violent points of criticism from consumer and data protectionists. They feared that a mixture with the Schufa data could lead to a kind of super score to the possible disadvantage of consumers.
Another change apparently affects the credit check process. According to Schufa, the end consumer should now receive the results of the analysis in advance and then decide for himself whether he wants to transmit them to a company. The Schufa wants to bring more transparency into the process. That was also a point of criticism from the data and consumer advocates.