Data Reforms May Cost €5bn

CSA warns EU data reforms may cost €5bn -

New EU rules on data protection could cost businesses across the EU an estimated €5 billion (£4.3 billion), the Credit Services Association (CSA) has estimated.

The Albrecht Report, which was issued by German politician and European parliament member Jan Philipp Albrecht, has proposed a ban on customer profiling as part of revisions to the EU Data Protection Regulations.

But the CSA argued that despite its efforts to protect the personal data of consumers, the report’s recommendations will leave individuals “worse off”.

It also suggested that the removal of customer profiling would fly in the face of “Treating Customers Fairly” rules.

The association, which represents the UK collections market, said that restricting the use of data and giving consumers “the right to be forgotten” will make it more difficult for them to access credit and for creditors to collect what they are owed.

Peter Wallwork, chief executive of the CSA, said: “If you restrict the amount of verified and reliable data available, you expose consumers to the risk of taking on too much credit and ultimately falling into debt.

“On the other side of the coin, a consumer who chooses to have the ‘right to be forgotten’ because, for example, they do not want to be contacted after visiting a particular website, may find that their request counts against them when they apply for credit as no information is held about them.”

It also warned that the cost of implementing the new directive may force many small and medium-sized enterprizes (SMEs) into insolvency.

Wallwork added: “Based on the UK Ministry of Justice risk assessment, we estimate the cost to business across all 27 EU states will be around €5 billion – double the EU’s projected savings – much of which will be borne by SMEs at a time when economic recovery is fragile, at best.

“Smaller businesses will simply not be able to absorb these costs, and many, as a result, will be pushed to the brink.”

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