Data Privacy Update. August 2014

New trends of personal data protection in credit relations while transferring debt information to the third parties

The recent court practice proves for the banks (Bank) to pay more attention to compliance not only with the Personal Data Protection Laws, but also bank secrecy and consumer protection laws while transferring personal data of the borrowers (Borrower) to the relevant third parties involved in debt recovery. Furthermore, it may be necessary to restate the internal policies and contractual arrangements between the banks and borrowers to ensure obtaining proper consent on transferring personal data to third parties.

Specifically, at the end of July, this year the Court of Appeal upheld the ruling of the first instance court and declared illegal the transfer of personal data of the Borrower (defendant) to the debt collector by the Bank (respondent). In particular, the Bank transferred the data on address and debt of the Borrower. The courts confirmed the fact of breach of bank secrecy and consumer protection laws by the Bank. On this basis the Bank’s actions were qualified as unfair business practice.

The courts rejected assertions of the Bank that the consent on personal data transfer was granted by the Borrower under the document called “General Credit Terms” (SK: stipulates the right of the Bank to transfer Borrower’s data, terms of the agreement, debt status, etc. to the third parties). The courts found no reason to believe that “General Credit Terms” is a part of the credit agreement.

Finally, the court ruled on reimbursement of moral damages incurred by the Borrower and caused by the Bank. The courts came to conclusion that the debt recovery activity of debt collectors attracted by the Bank (SK: quantity and content of the messages sent to the Borrower) should be qualified also as unfair business practice.

For more information, please contact Oleksandr Padalka or Oleg Klymchuk.

Related news

27 March 2024

News

Sayenko Kharenko has been recommended as a top-tier firm in almost all practice areas researched for Ukraine in The Legal 500 EMEA 2024 edition 
27 March 2024

News

GAR 100 ranking has recognised Sayenko Kharenko as a top global arbitration practice for the six-year in a row 
21 March 2024

News

The Business Security Index was calculated based on Sayenko Kharenko’s joint research report “Security Assessment: Doing Business in Ukraine”
Notification cookies

We use cookies to analyze the behavior of visitors
of our website and improve it. By using our website, you consent to these cookies in accordance with our Cookie Policy.