Rb. Amsterdam - ECLI:NL:RBAMS:2023:6456

Rb. Amsterdam - ECLI:NL:RBAMS:2023:6456
Court:	Rb. Amsterdam (Netherlands)
Jurisdiction:	Netherlands
Relevant Law:	Article 17 GDPR Article 21 GDPR
Decided:	26.10.2023
Published:	02.11.2023
Parties:	ING Bank
National Case Number/Name:	ECLI:NL:RBAMS:2023:6456
European Case Law Identifier:	ECLI:NL:RBAMS:2023:6456
Appeal from:
Appeal to:
Original Language(s):	Dutch
Original Source:	de Rechtspraak (in Dutch)
Initial Contributor:	n/a

The District Court of Amsterdam held that a data subject’s right to be forgotten under Article 17 GDPR overrode the interests of a credit ranking agency in holding their financial records.

English Summary

Facts

In December 2005, the data subject took out a €202,500 mortgage for a house with ING Bank (the controller). In 2008, the data subject faced financial hardship and could no longer pay off the mortgage, and had to declare bankruptcy. In 2009, the house was sold at auction for €147,788, which left the data subject with a residual debt of €77,575 (due to accrued interest).

The data subject enrolled in a debt-assistance programme that they completed in 2021. By this time, ING Bank had received €72,000 from the data subject and wrote off its claim. Despite that, ING Bank still had the data subject negatively registered in the Central Credit Information System (CKI) of the Bureau Krediet Registratie (BKR). BKR is the body which collects and manages all credit data in the Netherlands.

On 6 December 2022, the data subject made an erasure request under Article 17 GDPR and an objection under Article 21 GDPR to have their negative registration no longer processed and removed. ING Bank refused both requests. In particular, ING argued that its legitimate interest in recording the data subject’s credit history overrode the data subject's right to be forgotten. On 19 April 2023, the data subject filed a claim with the Amsterdam District Court.

Holding

The Court held that the interests of the data subject overrode those of ING Bank (the controller) in relation to the erasure request. In reaching its conclusion, the Court undertook a balancing test to determine whether the Bank had sufficiently demonstrated compelling legitimate grounds for processing which were capable of overriding the data subject’s interests and rights.

In the balancing test, the Court determined the scope of the controller's legitimate interest through the purposes behind the Bank’s credit registration system. The Court understood the purpose of the credit registration system to be twofold: 1. To protect consumers from taking on too much debt; 2. To protect lenders against consumers who do not or cannot fulfil their financial re-payment obligations.

ING submitted that its legitimate interest in maintaining the registration with BKR outweighed the data subject’s interests, as the data subject had a problematic debt situation for several years and as a result had low creditworthiness. Consequently, maintaining their negative registration fulfilled the purpose of credit registration system.

The Court held that ING’s grounds did not constitute compelling legitimate grounds which could override the data subject’s legitimate interests. As the data subject had improved their credit worthiness and paid off their debts, the bank no longer had a legitimate interest in having them registered negatively because this was in opposition to the system's purpose

The Court took into consideration that the data subject had sought help for the debt and had managed to pay it off. Moreover, the Court also took into consideration that the bankruptcy arose following a significantly bad economic period after the 2008 financial crash. As a result, ING’s did not have a compelling legitimate interest in maintaining the registration, and thus, their interests did not override those of the data subject.

As a result, the Court ordered ING to fulfil the data subject’s erasure request within one week of the ruling.

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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.

Case number / appeal number: C/13/732573 / HA RK 23-126

Order of Oct. 26, 2023

in the matter of

[applicant] ,

residing in [place of residence] ,

applicant,

attorney at law M. de Boorder,

at

the limited liability company

ING BANK N.V.,

based in Amsterdam,

defendant,

attorney at law Mr. D.J. Posthuma.

The parties will hereinafter be referred to as [the applicant] and ING.
1 The procedure
1.1.

The course of the proceedings is evidenced by:

    -

    the petition filed on April 19, 2023, with attachments,
    -

    the interim order dated June 1, 2023, which provided for an oral hearing;
    -

    the defense with attachments, received at the Registry on September 6, 2023;
    -

    the letter dated September 4, 2023 with attachments 25 to 29 from [the applicant] ;
    -

    the letter dated September 8, 2023 with attachment 30 from [the applicant] ;
    -

    the oral proceedings of September 11, 2023, notes of which were taken by the Registrar and are on file and speech notes were submitted by the parties' lawyers. 

1.2.

Then disposition was determined on today.
2 The facts
2.1.

In December 2005, [the applicant] and her then partner took out a mortgage (with contract number [number] ) with ING to finance a home. The financing amounted to €202,500.00 and had a term of 30 years.
2.2.

During the same period, [the applicant] together with her then partner operated a company that operated several sushi restaurants. In 2007/2008, the financial situation of this company deteriorated and the company was declared bankrupt. From then on, arrears arose in the payment of the monthly installments of the mortgage loan. In addition, other debts arose.
2.3.

In 2008, ING proceeded to demand the outstanding amount. ING finally decided to cancel the mortgage loan in 2009 and exercised its right of execution. The home of [the applicant] was auctioned off at the end of 2009 and sold by ING for an amount of €147,788.79. This created a residual debt of €77,575.05.
2.4.

ING subsequently requested repayment of the outstanding amount under the mortgage loan on several occasions. [the applicant] partially repaid her debt to ING during this period.
2.5.

For her debts, [applicant] sought help in 2017. The Kredietbank Nederland set up a debt assistance program for [applicant] where [applicant] was supervised by a budget manager since 2018. In December 2019, [applicant] was admitted to the statutory debt restructuring scheme (hereinafter: WSNP). ING submitted its claim to the administrator.
2.6.

The WSNP was completed at the end of 2021 as a result of a creditors' agreement. ING has received €18,363.31 based on the final distribution list and has paid an amount of

€72,000.00 had to write off its claim.
2.7.

[the applicant] is negatively registered in the Central Credit Information System (CKI) with the Bureau Kredietregistratie (BKR) as a result of the mortgage loan. At

March 8, 2022 a arrears coding A, on November 27, 2019 a particularity coding 2 and on October 18, 2021 a particularity coding 3 has been placed. This means that a credit facility has been granted, arrears have arisen on it, the (residual) claim has been claimed and an amount of at least €250.00 has been written off. The registration has an actual end date of October 18, 2021 and will in principle remain visible until October 2026.
2.8.

By letter dated December 6, 2022, Dynamiet.nl for [applicant] requested ING to remove the aforementioned registration. ING denied this request.
3 The request
3.1.

In summary, [the applicant] seeks an order, to be declared provisionally enforceable, ordering ING to remove the BKR registrations, on pain of forfeiture of a penalty payment, and ordering ING to pay the costs of the proceedings and follow-up costs.
3.2.

[applicant] bases her request on the fact that the BKR registration is no longer proportionate, that the balancing of interests should be in her favor, and that the registration should therefore be removed early.
3.3.

ING put forward a defense and moved to dismiss the application.
3.4.

The parties' contentions are discussed in more detail below, to the extent relevant.
4 The Assessment
4.1.

There is no dispute between the parties that the BKR registration is correct per se. The issue in this case is whether the particularity codes should be removed before the five-year period expires. The court will first explain in general terms below what the rules are if someone wants a BKR registration removed and how a request for removal is evaluated. The court will then assess [the applicant's] request against that review framework.

Review framework
4.2.

A BKR registration qualifies as processing personal data to which the General Data Protection Regulation(AVG) applies. Under Article 21 (1) AVG, a person (here [the applicant] ) may object to the processing of personal data concerning him on the basis of Article 6 (1) (f) AVG because of his specific situation. The controller (in this case ING) must honor the objection unless it submits compelling legitimate grounds for the processing which outweigh the interests, rights and freedoms of the person concerned or which are related to the establishment, exercise or substantiation of a legal claim. If the objection is upheld, the controller must delete the personal data without unreasonable delay pursuant to Article 17(1)(c) AVG. If the controller does not honor the objection, the data subject may, if necessary, ask the court for an effective remedy (Article 79 AVG and Article 35 of the General Data Protection Regulation Implementation Act). The court tests whether the controller has made it plausible that its overriding legitimate interests (the purpose of the credit registration) outweigh the interests or fundamental rights and freedoms of the data subject in this particular case (recital 69 AVG). The purpose of credit registration is twofold: on the one hand, to protect consumers from over-indebtedness and, on the other hand, to protect lenders from consumers who do not or cannot fulfill financial obligations.
4.3.

The balancing of interests must be made on the basis of the facts and circumstances known at the time of the balancing. This balancing may therefore also include facts and circumstances that occurred after registration. Such a registration and its enforcement must comply with the principles of proportionality and subsidiarity. This means that the infringement on the interests of the data subject must not be disproportionate in relation to the purpose of the processing and that this purpose cannot reasonably be achieved in another way that is less harmful to him.
4.4.

When making a request under Article 21 AVG, the controller must respond to the data subject's reasons for objecting - and substantiated to the best of its ability - related to its specific situation. Circumstances that may play a role in assessing the objection in the case of a Code A, 2 and/or 3 are, for example:

- The amount of debt and/or arrears;

- Whether any payment arrangement was properly fulfilled;

- the reason for (the occurrence and persistence of) the arrears and the degree of culpability;

- person's current financial situation (including income) and if it is stable again: for how long;

- Whether the individual has other debts;

- Whether there has been serious default (structural or otherwise);

- the circumstance that the person concerned cannot wait with the loan (for example, to buy a house) until the five-year period has expired (for example, because of family and living situation);

- the passage of time since the debt was repaid.

The request of [the applicant]
4.5.

[the applicant] explained that her current living situation is unsatisfactory and therefore it is very important for her to be able to buy a home, but this is not possible due to BKR registration. She currently lives with her two children in a rental property, but this property is not suitable for several reasons. [the applicant's] current home is too cramped to provide [the applicant's] two children with their own bedrooms. Given the children's medical indications (one of her children is autistic and the other has adhd), the current home is too small which causes a lot of stress and conflict at home. [applicant] needs to continue living in the area of [place of residence] for her work and for her children. The children have contact with their father and attend school in [place of residence]. Suitable housing in the private rental sector in the [residence] area is very scarce and, to the extent that it is available, very expensive. This means that [the applicant] pays more monthly expenses than if she bought a comparable home. At the oral hearing, she explained in this regard that at the time of the oral hearing there was only one three-bedroom rental property available in [place of residence] for a period of nine months. In addition, many secondary conditions are also imposed for rental properties, including the submission of a BKR statement. Furthermore, protection through BKR registration is no longer necessary. The registration is due to the long aftermath of the problems of the demise of [the applicant's] company, and in this respect is largely due to the collapse of the economy in 2008/2009. As a result, [the applicant's] home was sold for a very low amount, creating a residual debt. Due to the bankruptcy, [the applicant] lost her business and therefore lost all of her income. At the same time, [the applicant] developed relational problems and for a time she also did not fare well mentally. In 2017, [applicant] sought help and eventually started a WSNP process. In it, she repaid in full according to her assets and was granted a clean slate. [the applicant] has been extremely proactive in the Kredietbank Nederland and WSNP trajectory and has been financially stable for quite some time now.
4.6.

ING takes the position that the interests in maintaining the BKR registration outweigh the interests in removing it. It explained that [the applicant] had been in a problematic debt situation for years and had had to deal with a more comprehensive problem during the same period, with [the applicant] herself stating that from 2017 she had tried to cope with those problems with the help of third parties. In financial terms, this ultimately led to the joint creditors having to write off over €150,000 in 2021. For ING, this amounted to €72,000.00. In addition, [the applicant] completed her WSNP program with a gift from her family. ING disputes that [applicant] is financially stable. She still has considerable payment obligations to, for example, the tax authorities. Moreover, ING is of the opinion that the financial situation raises the necessary questions, including whether [applicant] is not taking on too much with her full-time employment and the newly established companies. It is therefore still important to protect the financial sector and the information about [applicant] in the BKR register. The interests claimed by [applicant] to buy a home do not outweigh this. According to ING, there should be quite suitable rental properties in [place of residence] and the surrounding area, if the living situation does not currently meet one's needs.

Interest of [applicant] outweighs
4.7.

The court finds that the interest of [the applicant] outweighs the interest of the lending institutions in this particular case. The following explains why the court reached this opinion.
4.8.

ING correctly pointed out that [the applicant] had several debts in the past and also took a long time to get out of this debt problem. However, [the applicant] has sufficiently argued that she has had her life on track for quite some time now. [the applicant] has been working in her brother's family business for years, as a manager since early 2022, and has been running her own business since November 2022 to perform administration work for third parties. As a result, [applicant] has significant savings and her financial situation is stable. The questions expressed by ING regarding the amount of work, [applicant's] income and liquidity of her employer have not been sufficiently substantiated and, moreover, sufficiently refuted by [applicant]. The court also took into account that [the applicant] had adopted an extremely proactive attitude in the trajectory of the Kredietbank Nederland and the WSNP. After all, both the practitioner of the trajectory of the Kredietbank Nederland and her former administrator in the WSNP have stated that they are extremely satisfied with the way in which [the applicant] behaved at the time of their assistance. In addition, the former administrator stated that it was striking in [the applicant's] file that they always informed her in a timely and complete manner and responded immediately to the questions she had. From her perspective, [the applicant]'s self-reliance was above average. The court also weighed in that the debts arose as a result of the bankruptcy of the company of [applicant] and her then partner during an economically bad period (2008). As a result, [applicant] was in financial difficulty for a long time. During that period [the applicant] managed to pay off the smaller debts. Three large debts, two business loans and the mortgage loan from ING, proved to be unsolvable for her. In 2017, she finally sought help from the Credit Bank and got her finances under control. [the applicant] also sought psychological help and her psychologist's final report in 2019 shows that treatment was successfully completed. It is understandable that [applicant] wants to put her debt situation behind her and purchase an owner-occupied home for the benefit of her family. [applicant] has made the need for this sufficiently clear. It is quite understandable that her current rental property is inadequate given her children's medical indication. [the applicant's] primary request will be granted.
4.9.

The requested penalty payments will be rejected. The court gives no reason to believe that ING will not comply with this order.
4.10.

The court ordered ING to pay the costs of the proceedings, as it was the party proven wrong. The legal costs on the part of [the applicant] up to this date are estimated at €1,872 (€676 court fee and 2 points x rate II of €598). ING is also ordered to pay the costs incurred after this order. These costs are awarded in the manner stated under 5.3.
5 The decision

The court
5.1.

orders ING to have the registration or (special) coding(s) in the name of [applicant] in the CKI under contract number [number] removed within one week of the date of this decision,
5.2.

order ING to pay the costs of the proceedings, estimated to date at €1,872.00 for [the applicant],
5.3.

orders ING to pay the costs incurred after this order, estimated at €173.00 for attorney's fees, to be increased by €90.00 for attorney's fees and the costs of service if ING has not paid within fourteen days of notification of this order and the order is subsequently served,
5.4.

Declares this order to be provisionally enforceable to this extent,
5.5.

Dismisses the more or less claimed.

This order was made by Mr. L. Voetelink, Judge, assisted by Mr. M.M. de Keizer, Registrar, and pronounced in public on October 26, 2023.1