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Credit Bureau – when companies threaten with an entry

Anyone entering into a contract undertakes, by signing it, to comply with all resulting rights and obligations. If he does not do that, then it is a breach of contract.

This is the case, for example, if the agreed monthly installments for the mobile phone contract or for the credit agreement are not paid, delayed or only partially paid. The creditor, ie the mobile operator or the credit institution, has a claim to fulfillment of the contract, ie the contractual payment. He can easily enforce this with a dunning procedure and the subsequent court ruling.

But that costs time and money. Apart from that, the defaulting debtor will not pay the due installments until then, including in the next few months. In this situation, the companies threaten as creditors with a negative registration in the credit bureau, in the database of private credit agencies “protection community for general credit protection”. Whether this is so correct, and what impact that can have for the debtor is made clear by this example with a mobile phone contract.

Everything is approved with the credit bureau clause

Everything is approved with the credit bureau clause

The customer has signed a two-year contract with the mobile service provider some time ago. The contract also includes the so-called “credit bureau clause”. By signing the contract, the consumer declares his consent to the mobile service provider being allowed to view the credit bureau database for credit checks and that the subsequently concluded mobile phone contract is entered there as information. At this time, however, it is not discussed that with the “credit bureau clause” and future entries to this contract, of whatever kind, so to speak, “have been approved”. This is indeed in there, as a fine print, however, as good as never read and not mentioned.

Failure to pay the contract rate is a breach of contract. The mobile service provider does not want to forego the revenue, but insists on contract performance. He sends the customer a first reminder. If he does not pay then a second reminder follows. In it, the debtor is informed that his illegal behavior is reported to the credit bureau and “registered in his credit bureau”. This means that the default of payment is entered as a violation of this mobile phone contract in the credit bureau database.

Such negative registration has a direct impact on the credit bureau score

Such negative registration has a direct impact on the credit bureau score

This is the mathematical result of all personal entries in the credit bureau database for the individual consumer. The score is expressed in percentage points, the theoretical maximum is one hundred percent. The lower the score, the worse the credit rating. If the person concerned wants to sign a new mobile phone contract with another provider, then he must also sign the “credit bureau clause” again. A glance “into his credit bureau” shows the provider a weak credit bureau score. In addition, the payment period is displayed in the existing contract. It is said that the business connection is rejected because it is a risk customer. That not only looks like the mobile service provider, but all other business partners of credit bureau as well.

These include banks and savings banks, mail order companies, leasing companies and all telecommunications companies with fixed network, Internet and mobile communications. A single negative registration can literally make the participation in economic and social life difficult or even impossible for the consumer for years to come. The mobile operator as a creditor this situation is known. He wants to achieve with the “credit bureau threat” that his claim will be paid. Only because he is interested. The customer can no longer expect a connection contract anyway.

From now take over the collection companies

From now take over the collection companies

Often, the creditors hand over or sell their claim to a collection agency, also called collection agency. These service providers “live on it” to recover open claims from defaulting debtors. In addition you use all legal possibilities, and also you “like to threaten with the credit bureau”. In addition to the open demand, in this case several monthly installments for the mobile phone contract, you bill the debtor for its own costs, often in the triple-digit euro range.

But until the entry in the credit bureau database, there is still a long way, the mobile customer can directly and actively influence. In Germany, the storage, saving and deleting of personal data is regulated by law very clearly. In this case, § 28a Federal Data Protection Act, short BDSG, the legal basis to which both the mobile operator and the collection agency must comply. In this paragraph, the transfer of data to credit agencies, including the credit bureau, is regulated by the fact that the person concerned is required to register a default on payment as a breach of contract

  • as a debtor has explicitly recognized the claim
  • has been reminded at least twice in writing after the due date
  • timely, but at the earliest with the first reminder about the credit bureau transmission has been informed
  • as a debtor has not denied the claim

Contact with the creditors may be very helpful

Contact with the creditors may be very helpful

For the debtor as a contractor, it is most important to respond to reminders. Certainly, there are more pleasant letters and letters than reminders about outstanding debts. In this case, however, it must be replied to, in writing by drop-in, by registered delivery or by registered letter. The letter can be short and concise. He must, however, contain the words “… that the demanded payment is denied …”. This ensures that neither the creditor nor the debt collection agency commissioned by him may have the late payment entered in the credit bureau database. This has nothing to do with the subsequent separate examination and decision as to whether the claim is justified. However, the consumer has achieved that “his credit bureau” is not burdened by a negative entry at this time.

In a final ruling issued in the first quarter of 2015, the BGH has clearly defined what creditors are allowed to do in this situation and what is not. The wording in the reminder should not come across as a threat to the debtor, or even as a junkim according to the motto: If you do not pay, then threaten you a negative credit bureau with even more negative consequences. A default may only be reported to credit bureau if the claim is undisputed. This wording in the letter of formal notice may be decisive in the exact wording whether it is an unjustified coercion of the debtor or a justified credit bureau declaration.

The payment-based mobile radio customer must separate in

  • credit bureau entry
  • contract

It has always proved to be good and right that the debtor communicates with the creditor. By no means both sides must always agree. It is helpful to respond to the first reminder and to deny the claim. Thus, in any case, a negative credit bureau entry is prevented until “the matter is settled”. The customer now has the opportunity and also the necessary time to deal with the creditor. At this time he incurs costs of about 3 EUR for the letter, which he sends by registered mail.

Even the defaulting customer is still an equal contracting party.

Even the defaulting customer is still an equal contracting party.

There are many and good personal reasons that can cause payment problems. The legislator protects the consumer by the fact that in § 28a BDSG is formulated clearly and quite narrow, under which conditions credit bureau messages are admissible. Consumers, however, are expected to literally touch each other as directly affected. He must actively exercise his right. In this case, a “credit bureau threat” is a short letter sufficient with the content that the claim is denied. As of now, it is no longer disputed for the creditor. In addition, the debtor has expressly stated that he does not recognize the claim. It is not better and clearer!

On the other hand, due to this current and final judgment of the Federal Court of Justice, the creditors are obliged to formulate their letters of formal notice correctly and in accordance with the law. You have to expect the consumer to turn to a trusted lawyer or one of the consumer centers. At the latest there, the wording of the letter of formal notice is “scrutinized”. According to experience, reminders are composed of several text modules for the sake of simplicity, not infrequently “stacked together”. Such negligence should benefit the consumer by having the claim legally verified – or by denying the claim at an early stage.

Jerry Gipe

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