Autor: María del Pilar Duplat Molano y Gabriela Mancero
On July 30, 2019, Luis Fernando Velasco and other senators filed a proposal for statutory law before the General Secretary of the Senate of the Republic of Colombia to amend the current financial habeas data regulation. Said project seeks to enhance the protection of the habeas data right of people regarding information contained in databases of the financial, commercial and credit sectors.
The current regulation in Colombia regarding the protection of personal information in databases has provided a set of strong standards for the management of data in fundamental areas such as the financial sector.
The latter because it is important to establish a set of rules to ensure that there is sufficient and reliable information on the credit behavior of people and the level of risk that a determined person entails based on its credit history. However, it is also paramount to provide people with tools to correct and rectify the information on their financial behavior and to establish a set of rules that do not sanction people on a permanent basis to prevent the “financial death” of people who have been reported on credit records.
The Statutory Law project No. 62 of 2019 seeks to enhance the protection to the habeas data right by providing more and better tools for people to exercise their right and have more effective means to know, update and rectify their credit record information in financial, commercial and credit databases. In this article, we sum up the proposed amendments to Law 1266 of 2008:
1. Reporting and updating of information
In relation with the reporting and updating of the information, the Statutory Law Project No. 62 of 2019 provides that:
- The sources of information must give previous notice, in accordance with current regulations, to the users any negative report on their credit behavior before reporting them before the credit record agencies.
- Negative reports for default in debts for an amount equal or lower that 20% of a minimum wage (COP 165,623, approx. USD 49), can only be made after the source has given 2 previous notices to the debtor, and the last notice must be at least 20 days from the date that the negative report is submitted.
- Sources who withdraw a negative report of a user or update the credit score of a user due to the cessation of a fact that caused the diminishment of the credit score of the user, must update all of the negative or unfavorable information of the user in the entire databases related to the user’s credit score.
- The sources of the credit information must report the negative information within a maximum term of 18 months after the debt is due.
- The source must immediately withdraw the negative report from the databases if it does not provide previous notice of the report to the users in the way provided by law.
- Sources must report any novelty to databases administrators at least once a month, so the databases administrator can update the information.
2. Permanence of reports in credit records
Nowadays negative reports have an expiration term in financial records of 4 years after the user has paid the debt. Nonetheless, the statutory law project introduced the following amendments regarding the permanence of positive and negative information of users in credit score databases:
- Positive information must remain indefinitely on financial, commercial and credit databases.
- Information relating to the default in payment of debts will have a permanence period equivalent to the default period plus 2 years maximum, which will count from the date that the debtor pays the defaulting fees or from the date in which the debt ceases to exist.
- If the creditor has not initiated a judicial collection procedure against the debtor, the negative information and data relating to the default in payment of debts will expire after 5 years from the date in which the debt was in default. After this period has passes, the administrator of the databases must delete the negative information from the database.
Nonetheless, after there is a final decision in the judicial collection procedure, the negative report will expire immediately once the procedure is finished.
3. Consultation of the Financial Records
Currently the owners of the financial information may only consult the records free once a month, and the consultation of the credit records by the owner reduces its credit score. The amendment provides that:
- The users may consult their credit records at any time, through any means and without having to pay.
- The consultation of the credit records by the owner of the data may not reduce its credit score.
The amendment also provides an explicit prohibition to employers to use credit score information for the purposes of making employment decisions.
4. Correction of information of victims of impersonation crimes
According to the amendment, victims of crimes of impersonation who have to pay debts because of this crime must:
- File a formal denounce before the pertinent authorities.
- File a request of correction of the data before the source of the information with the corresponding supporting documents.
- Denounce the crime of fraud to which it has been victim.
After they have followed this procedure, the administrator of the database, must include a caption in the personal record that says “Victim of Impersonation”.
5. Positive Administrative Silence
The amendment also introduces a “positive administrative silence”, which means that, in the event that the source or administrator of the credit score information does not reply a user’s petition within 15 working days, it is understood that the source or administrator of the credit score information has accepted the petition.
6. Transition Regime
Finally, the amendment provides in article 10 a transition period for administrators and sources of credit, financial and commercial information, to adjust and implement the changes in the regulation.
In a fast moving environment, an amendment of the Financial Habeas Data Law seems necessary to overcome difficulties. The current strict and cumbersome processes in Law 1266 of 2008 affect the possibility for people to have access to credit; thus, it is quite crucial to update our laws and processes, especially regarding markets and information of people.
The amendment proposed by Luis Fernando Velasco and other senators could allow people to have mechanisms to avoid unnecessary reports and to clean their credit records more efficiently and faster, and overall, to provide the users with mechanisms to facilitate the access to information about them in databases of financial, commercial and credit sectors.