Consumer lenders' access to people's data is too broad, according to Finland's Data Protection Ombudsman.
After the Tax Administration opened its positive credit register in April, information on nearly all consumer loan and credit histories were accessible to potential lenders.
But according to Data Protection Ombudsman, Anu Talas, lenders' access to that information is too broad.
She said that an assessment should be made about who actually needs such extensive information.
"There are major differences between a car towing service and a mortgage bank," she explained, suggesting that one solution would be to limit the amount of information that lenders can see.
The register was opened to help lenders check the creditworthiness of loan applicants, and to prevent consumers from taking on too much debt, among other reasons. The register includes information on consumer credit, housing loans, student loans and credit card balances.
However, adoption of the new system has not been free of problems, as some of the creditors' information about their customers has been erroneous.
The register contains details about around 11 million various consumer loans in Finland.
According to the Tax Administration's credit register project chief, Aino Sarakorpi, the unit has received around 300 requests to correct mistakes in the register.
Those mistakes have caused problems for consumers. For example, incorrect information can prompt apartment or vehicle purchase deals to fall through.
(Some) mistakes were made
Consumers should log in to the positive credit register and make sure the information is accurate — even before applying for loans, according to the credit and insolvency regulation chief at Finance Finland, Antti Laitila.
That way, prospective credit applicants can find errors and request they be corrected.
"At the least, this helps to avoid the unpleasant surprise of being turned down by creditors due to incorrect information," Laitila explained.
When consumers apply for loans, banks request an extract of the applicants' credit details from the positive credit register — but lenders can only do so after a customer applies for credit or requests changes to credit agreements.
Yle contacted three banks by email, asking what caused the errors, omissions and outdated information in the credit register.
According to Sari Takala, who is responsible for personal customer lending at Danske Bank, the erroneous information was due to a technical error that occurred during the transfer of data in the initial phase of compiling information in the register.
"In hindsight, it can be said that it would have been good to include a phase in the introduction of the register, when the uploaded data could have been checked and corrected before customers used the register," Takala said.
Anna Niinimäki, OP Financial Group's Head of Collaterals and Digital housing, noted that the positive credit register is new and that its implementation could not be piloted before it launched.
Meanwhile, Nordea's development manager, Tanja Eronen, also said she thinks such a major undertaking would have benefitted from being piloted.
Errors occurred early on
Danske Bank's Takala said that the bank made corrections to mistakes in the register as quickly as possible. However, she noted that in a few cases incorrect information resulted in delaying some customers' access to credit until the errors were corrected.
OP's Niinimäki said the bank is refining the contents of the register's database, and there may be delays concerning some of the information on it, for example. She added that the corrections were being made on a fast schedule but that the number of errors is relatively small, compared to the overall amount of data in the registry.
Niinimäki advised customers to check their credit information in the register and to contact the lender if there is a loan they do not recognise.
Nordea's development manager, Eronen, acknowledged that there were some errors in the registry as it was initially rolled out — the majority of which were related to credit card balances or debt settlement issues.
"Incorrect information can slow down the credit granting process, but it has not affected Nordea's credit decisions," Eronen told Yle, adding that if one of their affected customers applies for credit from another lender, Nordea has issued a certificate stating that the customer's entry in the register is incorrect.
The Finnish Competition and Consumer Authority (KKV) has received some reports about errors in the positive credit register, according to Erika Virtanen, a senior specialist at the authority.
She said that consumers have reported errors including listings of unfounded credit claims, repaid loans or other ambiguities.
What to do
Experts suggest that consumers who find mistakes in the credit register should first contact the lender in order to fix them.
But reaching a lender's customer service department is not always possible. In those cases people should reach out to the KKV who can try to reach the lender, debt collection agency or the Data Protection Ombudsman's office for advice.
If those steps are unsuccessful, people can directly contact the Data Protection Ombudsman's office or the Tax Administration's Incomes Register unit.
According to Data Protection Ombudsman Talus, plans are in the works to include housing company-related loans in the positive credit register.
A working group at the justice ministry is working on legislation to automatically include shareholder-specific debt information regarding housing association loans in the register.
This is because that kind of debt is an important part of assessing a consumer's creditworthiness, as housing-related debt accounts for a large part of a household's overall finances.
According to Talus, there is the possibility of limiting the amount and kind of information in the register that creditors are permitted to view.
"Creditors already have very broad rights to access information from the credit register, and they should not be unnecessarily expanded in the future," Talus explained.