Gerechtshof Den Haag - 200.271.226/01

GHDHA - 200.271.226/01
Court:	Gerechtshof Den Haag (Netherlands)
Jurisdiction:	Netherlands
Relevant Law:	Article 21(1) GDPR UAVG
Decided:	16.07.2020
Published:	07.07.2020
Parties:	ING Bank N.V.
National Case Number/Name:	200.271.226/01
European Case Law Identifier:	ECLI:NL:GHDHA:2020:1180
Appeal from:	Rb. Rotterdam (Netherlands) C/10/576775/HA RK 19-734
Appeal to:	Unknown
Original Language(s):	Dutch
Original Source:	de Rechtspraak (in Dutch)
Initial Contributor:	n/a

The Hague Court of Appeal upheld the decision of the Rotterdam Court of First Instance: the complainant did not have the right to object to his personal data processing. More specifically, he could not have a coded reference to his financial status removed from the Central Credit Information System (CKI) of the Credit Registration Office (BKR).

English Summary

Facts

A special code (“A”) registration was made at the Central Credit Information System (CKI) on 21 March 2018 in connection with the balance deficit on an ING payment account of the complainant that took place in 2016. On 19 November 2018 code A was changed to code H, which remains visible for the period of five years from that date.

The Court considered four complaints behind the appeal. Complaint 4 is challenging the proportionality of the registration in the Central Credit Information System (CKI), claiming that it should be deleted because it disproportionately affects his business. For example, the complaint was denied a business loan necessary to continue his business operations.

Dispute

The Court must assess necessity and proportionality of the processing the complainant has objected to and decide whether the interests, rights and freedoms of the complainant prevailed in this case.

Holding

The Court considered that ING’s interest in this processing was to prevent a debt problem and to inform lender about possible risks. ING was able to show evidence that the complainant’s financial situation was not stable.

The Court has agreed with the complainant that the code registration at the CKI may indeed constitute an obstacle to receiving credit. However, it has also considered that it was not possible to ascertain from the letters of loan refusal that this registration was among of the reasons of the credit denial. Complainant’s financial situation may as well have been considered insufficient by the potential lender.

In the view of the above, the Court ruled that there are compelling legitimate interests in maintaining the registration; the processing was necessary and proportionate.

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English Machine Translation of the Decision

The decision below is a machine translation of the Dutch original. Please refer to the Dutch original for more details.

Ruling
COURT OF APPEAL 
Civil Law Department 
Case number : 200.271.226/01
Case number : C/10/576775/HA RK 19-734
decision of 16 June 2020 
regarding
[appellant] 
living in Schiedam,
appellant,
hereinafter referred to as: [appellant]
Lawyer: Mr. M. de Boorder in The Hague,
by
ING Bank N.V. ,
based in Amsterdam,
hereinafter referred to as: ING,
Intimate,
Attorney at law: Mr. T.J.P. Jager in Amsterdam.
1 The proceedings 
By application of 19 December 2019, [the appellant] appealed against the order of 7 November 2019 issued by the District Court of Rotterdam. By statement of defence, with productions, ING contested the grievances. An oral hearing took place on 26 May 2020 by means of a Skype video link. Deedition was made of the documents submitted by Mr Jager on behalf of ING by notice of 8 May 2020 and by Mr De Boorder on behalf of [the appellant] by notice of 12 May 2020. The parties had their respective positions explained - ING by D.J. Posthuma and De Boorder by [Appellant] - on the basis of pleading notes sent in advance. The decision was then made.
2 The facts
The District Court has established facts under 2.1 to 2.13 inclusive. This establishment of facts was not contested, except insofar as under 2.5 the [Appellant]'s receipt of the letters of 16 May, 24 May and 7 June 2016 and 26 June 2017 from ING was also established. For the rest, the court will base its decision on the facts established by the court. 
3 The assessment of the appeal 
3.1 
This procedure concerns a request, based on art. 21 of the General Data Protection Regulation (AVG) in conjunction with art. 35 of the AVG Implementation Act, for the removal of a special code in the Central Credit Information System (CKI) of the Credit Registration Office (BKR). This special code - code A - was registered in the CKI on 21 March 2018 in connection with a balance deficit on an ING payment account of [appellant] that arose in 2016. On 19 November 2018, [the appellant] supplemented the balance deficit, after which, on 20 November 2018, code A was changed to code H, which is visible for another five years from that date. 
3.2 
By the contested decision, the court rejected the application for removal of the registration and ordered [the appellant] to pay the costs. The [appellant] lodged an appeal against this decision in due time, citing four grounds of appeal. Appeals 2 to 4 put forward various grounds which, according to [the appellant], imply that the special character code should not have been registered or should at least have been removed. 
3.3 
In its assessment of these grievances, the court of appeal puts the following first. ING is a provider of credit within the meaning of Section 1:1 of the Financial Supervision Act (Wft) and is obliged to participate in a system of credit registration pursuant to Section 4:32 paragraph 1 of the Wft. The CKI is such a system of credit registration that is maintained by BKR. ING is a participant in the CKI and, as a participant, is bound by the General CKI Regulations adopted by BKR (hereinafter referred to as: AR). The purpose of credit registration is to promote socially responsible financial services. Specifically, this involves protecting consumers from excessive lending and other financial problems (problematic debt situations) and limiting the financial risks for lenders in lending and preventing and combating abuse and fraud. 
3.4 
The registration of a special code in the CKI constitutes processing of personal data within the meaning of the GTC. Pursuant to Article 21 paragraph 1 of the AVG, in the event of an objection by the data subject, the data controller must discontinue the processing of the personal data, unless the data controller invokes compelling legitimate grounds for processing that outweigh the interests of the data subject. In its decision of 9 September 2011 (ECLI:NL:HR:2011:BQ8097), issued under the (then) Personal Data Protection Act, the Supreme Court considered that all data processing must comply with the principles of proportionality and subsidiarity, which means that the interference with the interests of the data subjects must not be disproportionate to the purpose to be served by the processing and that purpose cannot reasonably be achieved by any other means, less harmful to the data subject. It must be assumed that this principle also applies to the processing of personal data - and the assessment of a removal request - on the basis of (Article 21(1) of) the AVG. 
3.5 
Grief 3 argued that the repossession, which gave rise to the registration of the special coding, had arisen solely because ING had belatedly executed an enforcement attachment levied on the [Appellant's] payment account while [the Appellant] had in the meantime made payments from that account. The [appellant] could therefore not be blamed for the repossession, according to the complaint. 
3.6 
On the basis of the documents (including production 5b in the statement of defence in the first instance) and the documents traded at the hearing on appeal, the following is established about the role of the attachment in the creation of the redress position. On 26 February 2016, a garnishment under a garnishment order was levied on ING at the expense of [the appellant]. On 1 March 2016, ING wrote to [appellant] to reserve this amount in a savings account of [appellant]. On 20 April 2016, however, it (first) debited the amount for which the attachment had been levied from [Appellant's] checking account. On that date, the payment account was in overdraft. 
3.7 
The statements of account submitted from [the appellant's private account] show that [the appellant] made a number of payments between 26 February 2016 and 1 March 2016, but also that the majority of the outstanding balance arising on 20 April 2016 was due to payments made after 1 March 2016, i.e. during the period in which [the appellant] had to take into account that his account would be debited for the amount of the attachment. The [Appellant] did not make any claims about payments made between 26 February and 1 March 2016 to his business payment account. To the extent that [the appellant] had argued on appeal that he had not been informed of the attachment, the court of appeal failed to do so because [the appellant] did not explain how this related to his concrete and different position in the first instance and the letter of 1 March 2016 in which ING informed him of the attachment that had been levied. ING also referred to the latter and [the appellant] did not elaborate on it.
The fact that ING was entitled to write off the amount for which an attachment had been levied and that [the appellant] had to supplement a resulting overdraft in its relationship with ING was not (sufficiently) disputed as such. Against this background, [the Appellant] cannot be followed in his assertion that the repossession was (solely) the result of an ING error. The fact that ING, in its relationship with the BKR (pursuant to the applicable AR), had to register a position of redness such as the present one was not (sufficiently) disputed. 
Insofar as the [Appellant] was wrongly assuming - as argued by ING and also established at the hearing - that only an attachment had been made for the purpose of a legal costs order or at least that he would be able to pay this amount in full from the payment for such costs of his legal expenses insurance, this does not affect the foregoing. That presentation is entirely at the risk of [the appellant] and does not affect his relationship with ING. 
Insofar as the grievance argues that the repossession is exclusively attributable to an error made by ING in processing the attachment, it therefore fails. For the rest, the Court refers to 3.12 of this order, in which this will be included in the weighing of interests to be made. 
3.8 
According to grievance 2, ING should not have proceeded with the registration of the special encoding because [the Appellant] had received the advance notice letters dated 16 May 2016, 24 May 2016, 
7 June 2016 and 26 June 2017, so that, according to the complaint, the written advance notice required for registration pursuant to Article 25(3) of the AR 2017 has not been complied with. 
3.9 
In so far as the grievance alleges that registration may be proceeded with only if the receipt of a prior written notice is certain, it fails. The AR is an agreement between the lender ('business customer') and the BKR to which the account holder/borrower ('consumer') is not a party. Art. 25 paragraph 3 AR obliges the business customer "if there is a risk of arrears (...) to warn the business customer in writing in advance that failure to pay will lead to the BKR being notified of a delay". Paragraph 4 then stipulates that the business customer "can prove the dispatch of the advance notice by submitting a copy of the notice to the consumer or by submitting a printout of that notice from his computer system". With productions 7 and 8 in the statement of defence in the first instance, ING has sufficiently substantiated - in the manner referred to in paragraph 4 of the AR - that it has sent written prior information notices and has thus complied with the relevant obligations from the AR. It was neither asserted nor revealed that ING used an incorrect address. The grievance is (evidently) based on the assumption that Article 25 of the AR must be interpreted as meaning that, in the absence of proof of receipt of the written prior information notice (disputed by a consumer), the detailed coding may not be passed on or at least the registration must be removed at the consumer's request. However, facts or circumstances that justify such an interpretation have neither been stated nor proven. Apart from the fact that the consumer is not a party to the AR that limits its own scope of application in Article 2 to 'only the relationship between BKR and its business clients', the fourth paragraph of Article 25 AR rather indicates that the business client has fulfilled its obligations towards BKR by sending the prior notice. In addition to the above, it is not disputed that [the appellant] was in any event informed by means of a bank e-mail sent to him on 28 February 2018 that credit registration would follow if the balance was not replenished. The receipt of that bank e-mail has not been disputed. If [the appellant] has not opened this bank e-mail, this will be at his expense and risk. Finally, [the appellant] did not argue that the period between this notification (28 February 2018) and the registration (21 March 2018) was too short for him to pay the negative balance (which still existed at that time), or at any rate to request (further) respite. The foregoing is without prejudice to the fact that the manner in which a credit registration was announced may be taken into account in the weighing of interests (as referred to under 3.4). The Court of Appeal will deal with this in section 3.12 below. 
3.10 
According to grievance 4, the encoding is disproportionate and therefore affects [the appellant] disproportionately in his business operations, and the registration should therefore be deleted. 
3.11 
On the basis of the balancing of interests referred to in point 3.4, it must be assessed whether a detail coding should have been registered or (still) removed. 
3.12 
ING has relied on the general interests of the registration system for the registration of the particulars coding for the current long-term overdraft, in short: preventing a debt problem and informing lenders of any risks. 
According to [the appellant], however, he was and is financially stable and the risks mentioned do not arise in his case. The latter, however, has been substantiated and disputed by ING. Among other things, ING submitted an official report of an enforcement garnishment showing that [the appellant] had been ordered to pay more than € 85,000 in a judgment rendered on 15 January 2020. ING also submitted documents showing repeated arrears in payment for the mortgage on the home in the years 2017, 2018 and 2020. The [appellant] did not return to this matter. On appeal, [the appellant] submitted annual accounts for 2018, but no data for 2019, and at the hearing he did not dispute the fact that the annual accounts for 2018, despite the turnover of more than € 85,000, showed repeated arrears for the mortgage in the years 2017, 2018 and 2020. 
€ 1 million, appears from a gross annual income of (no more than) € 23,135. With all this, ING has sufficiently stated and substantiated (and has not sufficiently disputed) that in the situation of [the appellant] there is (was and is) a risk of non-payment. 
As mentioned in the discussion of grievance 3, although ING processed the seizure differently and later than it had announced on 1 March 2016, the origins of the repossession must nevertheless (largely) be attributed to [the appellant]. The repossession subsequently lasted more than two years, and it was not disputed either that [the appellant] had been contacted by telephone in 2017 to supplement the balance. The fact that [the appellant] - wrongly - believed that the seized balance would be paid to ING in full by his legal assistance insurance is at his risk and does not carry any weight in this case. 
The fact that a particular coding such as the one in question may generally constitute an obstacle to obtaining credit on the basis of the policy rules of credit providers has been sufficiently substantiated by [the appellant] and as such is not disputed. However, ING has disputed the alleged specific reason for the present disposal request - obtaining a loan for a commercial refrigerator necessary for business operations and for a luxury passenger car (Audi Q7). For example, ING disputed that it was the particular coding which led to the loan application being refused and pointed out that it was not possible to ascertain from the letters of refusal submitted by the intermediary from which lenders a loan application had been made with which underlying information. In those circumstances, according to ING, it must be held that the financial situation of [appellant] was simply insufficient to obtain credit for both vehicles. ING also contested the necessity of the purchase of the reefer, inter alia, because [Appellant]'s business was apparently able to operate without a new reefer during these proceedings. The [appellant] did not respond to this reasoned objection, so that the (continued) existence of the concrete interest in removing the registration put forward by the [appellant] was not established. 
Even if it is assumed with [the appellant] that he did not receive any written advance notice but was only informed of the possible registration by bank e-mail, the interest in maintaining the registration of this long-term red tape known to [the appellant] outweighs the interest in removing it. The Court of Appeal further refers to the considerations in section 3.9 above.
3.13 
Weighing up the interests discussed above, the Court of Appeal is of the opinion that the registration of the particulars coding is not disproportionate and that there are compelling legitimate interests in maintaining the registration. Facts that imply that the interest in registration, from the perspective of subsidiarity, could have been sufficiently served in any other way have not been put forward. Ground 4 is therefore also flawed. 
3.14 
The failure of grievances 2 to 4 implies that the application will be rejected. 
3.15 
Contrary to what [the appellant] invokes in ground 1 above, it is customary in petition proceedings such as this one to order costs in accordance with Article 289 of the Dutch Code of Civil Procedure. The Court of Appeal sees no reason to adjudicate otherwise in this case. Therefore ground 1 also fails. 
3.16 
In conclusion, the grievances fail and the contested decision will be upheld. [Appellant] will be ordered - as claimed - to pay the costs of the appeal, including post-clearance costs. 
4 Decision
The court:
ratifies the order of the District Court of Rotterdam of 7 November 2019;
orders [the appellant] to pay the costs of the appeal, estimated on the part of ING at 
€ 760 for out-of-pocket expenses, € 3,222 (3 pt x rate II) for the lawyer's salary and € 157 for subsequent costs, with provision that this amount will be increased by € 82 in the event that [the appellant] has not complied with this ruling within fourteen days of being notified;
declares these cost orders enforceable in stock; 
rejects the more or otherwise advanced.
This order was issued by B.J. Lenselink, J.W. Frieling and M.M. Kruithof and was pronounced at the public hearing on 16 June 2020 in the presence of the Registrar.