Rb. Amsterdam - C/13/704937 / HA RK 21-247
| Rb. Amsterdam - C/13/704937 / HA RK 21-247 | |
|---|---|
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| Court: | Rb. Amsterdam (Netherlands) |
| Jurisdiction: | Netherlands |
| Relevant Law: | Article 6(1)(c) GDPR Article 6(1)(f) GDPR Article 21 GDPR |
| Decided: | 09.12.2021 |
| Published: | 04.03.2022 |
| Parties: | Hoist Finance |
| National Case Number/Name: | C/13/704937 / HA RK 21-247 |
| European Case Law Identifier: | ECLI:NL:RBAMS:2021:8010 |
| Appeal from: | |
| Appeal to: | Unknown |
| Original Language(s): | Dutch |
| Original Source: | Rechtspraak.nl (in Dutch) |
| Initial Contributor: | Rijk Rouppe van der Voort |
Based on the data subjects’ right to object, the Amsterdam’s District Court ordered a credit lending company to stop processing personal data containing a registration about the data subjects’ previous payment default.
English Summary
Facts
On 1 February 2010, the data subjects obtained credit of €28,500 from a credit lending company (hereafter “Hoist Finance”). Soon after the agreement, first arrears in payment occurred in September 2010. Succeeding additional arrears, Hoist Finance sent a letter to the data subjects on 23 January 2014, notifying them that their default could lead to a registration at the Bureau Credit Registration (BKR in Dutch, hereafter "BKR"). Following a further increase in the debt, the data subjects and Hoist Finance eventually set up a debt repayment scheme on 1 January 2015. In 2019, the data subjects were exonerated by Hoist Finance from paying approximately €1,400 of interest. On 1 October 2020, the data subjects had paid off their credit. In total, they paid €40,667.67. Furthermore, they were registered in the BKR, which stated: “6 February 2014. [code] A. Default in payment 1 October 2020. [code] 3. Amount of €250 or more has been exonerated If nothing changes, this information will be deleted in October 2025.”
On 19 May 2021, the data subjects sent a letter to Hoist Finance, requesting to explain the proportionality and subsidiarity of the BKR registration. Hoist Finance replied on 4 June 2021, where it considered that it was in accordance with these requirements, and that the registration will not be deleted.
The data subjects requested the court to order the deletion of their BKR registration. They argued that the registration is disproportional because it prevents them from getting a mortgage for buying a house. Furthermore, their financial situation had improved.
Hoist Finance argued that the data subjects were defaulters from the start of the agreement. Furthermore, their financial situation should further stabilise. Also, the purchase of a house was not considered urgent.
Holding
In answering the question whether the BKR registration should be deleted, the court found that the legal basis for processing should first be established. It stated that there is currently debate in the judiciary about the legal basis for registrations at the BKR; either Article 6(1)(c) GDPR (legal obligation) or Article 6(1)(f) GDPR (legitimate interest). In another case, the Amsterdam’s District Court even asked preliminary questions to the Dutch Supreme Court regarding this matter.
According to the Advocate-General in that case (ECLI:NL:PHR:2021:831), Article 6(1)(f) should be followed, because: • the General Rules for the BKR registration regard it as the legal basis; • the BKR has issued guidelines for the application of Article 6(1)(f); • Article 6(1)(f) was the legal basis under the predecessor of the GDPR; • Article 6(1)(c) does not lend itself for application, as the law does not specifically mention the processing of personal data. Because of these reasons, the court found Article 6(1)(f) to be the legal basis for the BKR registration. Therefore, the data subjects have the right to object under Article 21 GDPR. This means that the data controller should in principle stop processing the data, unless the legitimate grounds for the processing override the interests of the data subject. Furthermore, the impediment on the interests of the data subject may not be disproportional in line with the goal of processing (proportionality test), and no other, less impeding, means exist in achieving this goal (subsidiarity test).
According to the court, the BKR registration must be deleted. Firstly, the debt repayment scheme from 2015 has been fully adhered to by the data subjects. Secondly, the data subjects have paid off the full credit and a high total sum of interest. Thirdly, their financial situation is considered sufficiently stabilised, due to their above-average income and not having any debts. Fourthly, Hoist Finance has neglected to inform the data subject that exonerating them from part of the interest would lead to a BKR registration. Given the total paid amount, the relatively small sum that had been exonerated, and the consequences of accepting the exoneration, the court found that the data subjects should have been informed.
For these reasons, the data subjects were considered to have sufficient interest in deletion of the BKR registration. The twofold goal of the registration, namely the protection of credit lenders and the protection of consumers against getting a too high credit, is no longer applicable to the data subjects. Furthermore, no legitimate grounds for the processing of the BKR registration override the interests of the data subjects.
Thus, the court ordered Hoist Finance to delete the BKR registration within a week. For every day of non-compliance, it laid down a pecuniary penalty of €2,000, with a maximum of €50,000.
Comment
It is interesting to note that the court has not awaited the final decision of the Dutch Supreme Court on the preliminary questions regarding the legal basis for a BKR registration. Rather, it seems to blindly rely on the conclusion of the Advocate-General. As is known, this conclusion is not binding, and the Dutch Supreme Court could decide otherwise. Still, the interpretation is strongly substantiated. Furthermore, it favours the position of data subjects by protecting a broad application of their right to object under Article 21 GDPR. At least, the interpretation has made the outcome of the case at hand possible, which seems no more than desirable.
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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.
order COURT OF AMSTERDAM Department of private law case number / claim number: C/13/704937 / HA RK 21-247 Order of December 9, 2021 in the case of 1 [applicant 1] , residing at [residence] , 2. [applicant 2], residing at [residence] , applicants, lawyer mr. M. de Boorder in The Hague, against the company under foreign law HOIST FINANCE AB, Located in Amsterdam, defendant, authorized representative Mr N. Mantezila. The applicants are hereinafter referred to individually as [applicant 1] and [applicant 2] and jointly as [applicants] et al. The defendant is hereinafter referred to as Hoist Finance. 1 The procedure 1.1. The course of the procedure is apparent from: † the application, with annexes, received at the registry on 15 July 2021, - the decision of 9 September 2021, which provides for an oral procedure, † the supplement to the petition, with one annex, † the statement of defence, with annexes, † the official report of the oral hearing of 19 November 2021 and the documents referred to therein. 1.2. The decision has been made today. 2. The facts 2.1. [applicants] et al. entered into a revolving credit agreement with (the legal predecessor of) Hoist Finance on February 1, 2010 with contract number [number] with a credit of € 28,500.00. 2.2. In September 2010, the monthly repayment of the revolving credit was in arrears for the first time. The arrears amounted to € 477.93. The backlog was made up at the time and had no consequences. 2.3. Hoist Finance informed [applicant 2] in a letter dated 23 January 2014 that there was a payment arrears of €508.94 and pointed out to [applicant 2] that failure to pay the installments could lead to negative coding at the Office Credit Registration (hereinafter: BKR) and claim of the total debt. 2.4. Hoist Finance informed [applicant 2] by letter of 5 February 2014 that the arrears had risen to € 772.21. In that letter [applicant 2] is given another five days to pay the total arrears. If she fails to do so, Hoist Finance will register a code in the BKR. 2.5. Hoist Finance informed [applicant 2] by letter dated 3 March 2014 that the payment arrears had risen to €1,035.76 and that the collection of the entire debt amount will be transferred to a collection agency, unless [applicants] et al. pay within five days. 2.6. On 1 January 2015, [applicants] et al. entered into a payment arrangement with Hoist Finance under which [applicants] et al. paid €649.08 a month to Hoist Finance. 2.7. [applicants] et al. and Hoist Finance made an arrangement in 2019 whereby Hoist Finance waived part of the interest owed by [applicants] et al. 2.8. On 1 October 2020, [applicants] et al. paid off the revolving credit. [applicants] et al. paid a total of €40,667.67. This amount consists of € 28,500.00 in credit and the remainder in interest. 2.9. [applicants] et al. have the following registration in the Central Credit Information System (hereinafter: CKI) of the BKR: “(…) Credit type: Revolving credit Contract number: [number] Amount: €28,500 Registration date: 10-02-2010 Date 1st repayment: 08-02-2010 Expected End Date: N/A Actual end date: 01-10-2020 Date coding Coding Explanation 06-02-2014 A Backlog 01-10-2020 3 Amount of 250 Euro or more has been debited If no changes are made, this contract will be removed in October 2025 (…)” 2.10. On February 4, 2021, Dynamiet Nederland requested information from Hoist Finance on behalf of [applicants] regarding the registration in the CKI. Hoist Finance responded to this request on February 17, 2021. 2.11. Dynamiet Nederland, on behalf of [applicants] et al., in a letter dated 19 May 2021, requested Hoist Finance to discuss the proportionality and subsidiarity of the registration. 2.12. Hoist Finance responded to Dynamiet Nederland's request by email dated June 4, 2021, notifying it that Hoist Finance believes that the registration meets those requirements and will not be deleted. 3 The request 3.1. [applicants] et al. request – in summary – that the District Court, by provisional order to be declared enforceable: I. primary: Hoist Finance orders that the registrations of [applicants] c.s. with contract number [number] in the CKI of the BKR be removed or have them removed within one week of the date of the decision, alternatively: Hoist Finance orders that the registrations of [applicants] c.s. with contract number [number] in the CKI of the BKR be limited to a period of three years and therefore to have this registration removed (or have it removed) as of October 2022, more alternatively: A decision that the court deems correct, II. determines that, if Hoist Finance does not comply with the sentence referred to under I., it will forfeit a penalty of € 2,000 for each day that it does not comply with the sentence, up to a maximum of € 50,000.00, III. Hoist Finance orders to pay the legal costs, including the subsequent costs. 3.2. [applicants] et al. base the request on the fact that the registration is no longer proportional. After payment arrears arose in 2014, [applicants] et al. were rightly registered in the BKR with a code A. In January 2015, [applicants] et al. and Hoist Finance made a payment arrangement. In accordance with Article 24 of the General Regulations CKI (hereinafter: AR), Hoist Finance should have placed a code of 1 in the BKR. If Hoist Finance had done this, a reconsideration would have taken place five years after registration, in accordance with the provisions of Article 28 paragraphs 2 and 5 AR. Because [applicants] et al. have complied with the payment arrangement for years, it was decided during the reconsideration that enforcement of the codes is no longer necessary. Under those circumstances, the registration was already deleted in 2020. The current situation of [applicants] et al. means that the BKR registration must still be removed. The payment arrears arose in 2014 due to a short-term problem. The situation of [applicants] et al. has been financially stable since the payment arrangement was entered into in 2015. [Applicants] has been earning a good income since that time, first as an employee, now with his own business as a road worker. [applicants] et al. have no debts. [applicants] et al. currently live in a rented house. In addition, they rent a shed, in which the work equipment of [applicants] is stored. The rental costs of those two objects are high. [applicants] et al. wish to buy a house with storage space for the work equipment. By taking out a mortgage they will be able to lower their costs. The BKR registrations make it impossible for them to take out a mortgage loan. [applicants] et al. therefore have a great interest in removing the BKR registrations. 3.3. Hoist Finance puts forward a defense and concludes that the request of [applicants] et al. Hoist Finance argues that [applicants] et al. do not have good payment morals. This is apparent from the fact that the first payment arrears arose in June 2010, four months after the credit was taken out. There is talk of a 'non-starter'. [applicants] et al. knew when entering into the credit that they would not be able to meet the payment obligations, or at least should have known this. Hoist Finance had to engage a collection agency. Payment arrears arose again in 2014, after which Hoist Finance registered a code A in the BKR. She then claimed the entire credit and registered a code 2 in the BKR on March 22, 2014. Code 2 has been removed from the BKR for reasons unclear to Hoist Finance. It was not possible to place a code 1 after claiming full credit and placing a code 2. A code of 1 can only be placed if the credit has not yet been fully claimed. That was in this case a passed station. More than a year has passed since the BKR registration was provided with an end date. The situation of [applicants] et al. should stabilize further. It is possible that there is currently an income, but this does not mean that there is certainty in the future that payment obligations can then be met. The wish of [applicants] et al. to buy a house is not of urgent importance. Moreover, it has not been established that [applicants] et al. cannot obtain a mortgage with the BKR registration. The protection of the interests of lenders is therefore still necessary in the case of [applicants] et al. For that reason it is too early to proceed with the removal of the registration. 3.4. Insofar as relevant, the parties' arguments are discussed in more detail below. 4 The assessment 4.1. Hoist Finance is a provider of credit within the meaning of Article 1:1 of the Financial Supervision Act (hereinafter: Wft). Pursuant to Section 4:32(1) of the Wft, Hoist Finance is obliged to participate in a credit registration system. Pursuant to Section 4:34 Wft, Hoist Finance is obliged to obtain information about the consumer's financial position prior to concluding a credit agreement with a consumer. The CKI is a system of credit registration, which is maintained by BKR. Hoist Finance is a participant in the CKI and as such is bound by the AR established by BKR, which includes further rules regarding credit registration. Payment arrears or other irregularities that arise during the term of a credit are displayed in the CKI with a special code. If the claim is settled, an end date will be noted with the contract and a term of five years will start, after which the special code will be removed. 4.2. Registrations such as the present BKR registrations can be regarded as processing of personal data to which the General Data Protection Regulation (hereinafter: AVG) applies. In principle, these BKR registrations will remain until October 2025. The question is whether there is grounds for earlier removal. 4.3. There is currently a discussion in case law about the legal basis for the registration and enforcement of BKR codes. In summary, the question is whether the basis for such processing of personal data lies in Article 6 paragraph 1 sub c GDPR (necessary to comply with a legal obligation resting on the controller, hereinafter: the c-ground) or in Article 6(1)(f) of the GDPR (necessary for the representation of the legitimate interests of the controller, hereinafter: the f-ground). 4.4. The basis for the registration is important for the manner in which and the period within which a request for the deletion/deletion of such registrations must be assessed. On 21 January 2021, the preliminary relief judge of the Amsterdam District Court referred preliminary questions about this to the Supreme Court (ECLI:NL:RBAMS:2021:174). The Advocate General concluded on 15 October 2021 that, in his opinion, the f-ground should be aligned, partly because this is the ground that has been expressly designated in the AR as the applicable processing basis, that the BKR has issued guidelines for the application thereof and that under the predecessor of the AVG, the Personal Data Protection Act, the f-ground was also the appropriate route. The c-ground is not suitable for this, since the law does stipulate that credit institutions are obliged to participate in a system of credit registration, but the required processing of personal data has not been elaborated in this. It is not legally determined which data must be registered in the CKI and under what conditions this takes place. This has been elaborated in the AR, but that is a contractual arrangement, for which there is no legal basis (ECLI:NL:PHR:2021:831). 4.5. In view of the foregoing considerations from the Advocate General's opinion, the court will also agree with the f-ground. This means that [applicants] et al. have the right to object under Article 21(1) of the GDPR. This means that when a data subject objects to the processing of personal data, the controller must honor that objection, unless the legitimate grounds for processing outweigh the interests of the data subject. Furthermore, according to settled case law of the Supreme Court, the processing of personal data must always comply with the principles of proportionality and subsidiarity (HR 9 September 2011, ECLI:NL:HR:2011:BQ8097, Santander). This means that the infringement of the interests of the data subject may not be disproportionate in relation to the purpose to be served by the processing (proportionality test), and that this purpose cannot reasonably be achieved in a different way that is less detrimental to the data subject ( subsidiarity test). Even if the data processing is permitted in principle and the processor has complied with the AR of the CKI, this balancing of interests cannot be omitted. 4.6. The purpose of the credit registrations and the resulting interest of Hoist Finance must therefore be weighed up against the interests or fundamental rights and freedoms of [applicants] et al. In the context of a request under Article 21 GDPR, the credit provider must respond to the submitted by the data subject – and substantiated as much as possible – reasons for objection related to his specific situation. Circumstances that may play a role in the assessment of the objection are, for example: † the size of the debt and/or the arrears; † the percentage that has been waived; † whether any payment arrangement has been properly complied with; † the reason for (the origin and continued existence of) the delay and the degree of culpability; † the current financial situation of the person concerned (including income) and if this is stable again: how long has it been; † whether the person concerned has other debts; † whether there has been a serious (structural or otherwise) default; † the circumstance that the person concerned cannot wait with the loan (for example to buy a home) until the five-year term has expired (for example due to family and living situation); † the passage of time since the repayment of the debt. 4.7. With regard to this last circumstance - lapse of time - the following is considered. The five-year term included in Article 14 AR is not a law in a formal or substantive sense. That term includes a policy decision by the representative organizations that together staff the BKR Foundation and as such has authority. As the end of the five-year term approaches, the time-lapse factor generally takes on more weight. The reason for this is that the interests that are still present in continuing the registration after a longer period of time decrease in weight in relation to the interests of the data subject in its removal. In short, the 'bar' with regard to the weight of the mutual interests to be taken into account, therefore, as time goes on after the registration of the recovery notification, will become increasingly higher for the lender and correspondingly lower for the party with regard to the recovery notification. who the data is registered. 4.8. The court will not consider the correctness of the statement of [applicants] et al. that after placing coding 2 a coding 1 should have been placed after all, resulting in a reconsideration in 2020. After weighing up the interests, the court is of the opinion that the registrations of [applicants] et al. in the BKR with regard to the revolving credit should be removed. This judgment is based on the following. 4.9. Hoist Finance argues that [applicants] et al. had poor payment morals, but the court has not shown anything of the kind. The fact that a arrears arose in 2010, shortly after entering into the revolving credit, did not result in a registration being placed in the BKR, this was resolved at the time. The payment arrangement made in 2015 has always been complied with by [applicants] et al. Moreover, [applicants] et al. ultimately paid the full credit and a large amount of interest, in total more than € 40,000.00. The origin of the arrears is related to the financial situation of [applicants] et al. at the time. [applicants] et al. have sufficiently demonstrated that the financial situation has been financially stable since 2015 and that [applicants] has earned an above-average income since that time. [applicants] et al. have no other debts. 4.10. The fact that [applicants] et al. have a code of 3 in the BKR is related to the remission of approximately € 1,400.00 in interest (which means that more than € 250.00 has been written off by the lender). When granting that remission, Hoist Finance did not tell [applicants] et al. that this would lead to the registration of a code 3 at the same time as the registration of the actual end date. Hoist Finance has stated that it did not have to tell [applicants] et al. because placing a code 3 is a purely administrative act. [applicants] et al. stated at the hearing that this is not correct, that such coding does indeed carry extra weight. Lenders look at the type of codes that someone has in the BKR and they are less likely to grant a credit when a borrower not only has an end date, but also a code 3. This means for lenders that they run a greater risk that they may not receive the full amount of credit. [Applicants] et al. stated that if they had been fully informed about this, they might not have applied for a waiver of the interest, but would have repaid the full amount. The court considers this statement by [applicants] et al., which has not been specifically contradicted by Hoist Finance, plausible, in view of the size of the total credit, the relatively small amount of interest that was waived and the impact of accepting this waiver. . Hoist Finance should have informed [applicants] et al. about this, which it therefore wrongly failed to do. 4.11. Against the background of the aforementioned circumstances, [applicants] et al. have sufficiently demonstrated that they have an interest in the removal of the registrations and that the dual purpose of registration, namely protection of lenders and protection of consumers against excessive lending, no longer applies in the situation of [applicants] cs It is not apparent from what Hoist Finance has countered that there are legitimate grounds for processing that outweigh the interests of [applicants] cs 4.12. The fact that [applicants] et al. have (only) been registered for more than a year does not change the outcome of the weighing of interests, now from the circumstances put forward, including in particular the fact that [applicants] et al. have fulfilled their payment obligations from January 2015 to October 2020 , it has been found that registration no longer serves the prescribed purpose. 4.13. The court will therefore order Hoist Finance to remove the BKR registrations (or have them removed). 4.14. Hoist Finance has put forward no defense against the penalty payment requested by [applicants] et al. This request will therefore be granted. 4.15. Hoist Finance will, as the unsuccessful party, be ordered to pay the costs of the proceedings. These are estimated on the part of [applicants] et al. at: - court fee € 309.00 - attorney's salary € 1,126.00 (2 points x rate € 563.00) Total €1,435.00 4.16. The subsequent costs will be budgeted and allocated in the manner as stated below under the decision. 5 The decision The court 5.1. condemns Hoist Finance to have the A3 coding of [applicants] et al. 5.2. orders Hoist Finance to pay a penalty of € 2,000 for each day that it does not comply with the provisions in 5.1. is included, with a maximum of € 50,000.00, 5.3. orders Hoist Finance to pay the costs of the proceedings, estimated on the part of [applicants] et al. to date at € 1,435.00, 5.4. orders Hoist Finance to increase the additional costs incurred by [applicants] et al after this judgment, estimated at € 163.00 in lawyer's salary, on the condition that the judgment has been served and the convicted person has not been convicted within fourteen days of notice has complied with the judgment, with an amount of € 85.00 in lawyer's salary and the writ costs of service of the judgment, including VAT insofar as applicable, 5.5. declares this cost order provisionally enforceable. This decision was given by mr. R.H. Mulderije, assisted by mr. Z.S. Lintvelt and pronounced in public on December 9, 2021.
