The never-ending credit data mess: new study out

BEUC NEWS - 17.10.2017

It’s happening without most of us knowing it: lending firms are increasingly relying on masses of data about us, the potential customers, to decide whether we’re creditworthy or a risk. The result is a growing risk that consumers find themselves locked out of certain financial services, or that a link is drawn between a consumer’s ability to pay more and higher prices. Worse, how this data is collected and being used varies from country to country or according to institutional arrangements.

The never-ending Credit Data Mess exposes the difficult and worrying questions arising over the gathering of consumer data and calls for an urgent rebalancing of the needs of credit data with the fundamental rights of data protection. It also reveals the state of disorder in the EU Single Market, where every EU Member State seems to have a different system in place.

The recent Equifax hacking incident raises serious concerns about security of our data and how it is traded by private commercial entities. The report makes concrete and urgent recommendations to EU legislators on how to regulate credit data and private credit bureaus.

Policy and regulatory questions for the EU financial services market become increasingly important in view of the new challenges presented by emerging technologies that use personal data processing or new business models that are capable of transforming the retail financial sector (‘FinTechs’).

The report was commissioned by BEUC and authored by Federico Ferretti, a Senior Lecturer at Brunel University, London.