The Central Bank of Ireland issued an apology on Monday for an error in its Central Credit Register (CCR) system, which resulted in the retention of borrowers’ information from May, June, and July 2018. Normally, data stored on the CCR is supposed to be deleted after five years, but due to this error, information from those three months was included in individuals’ credit reports. This mistake could have had a negative impact on loan applications over the past few weeks for borrowers who experienced repayment difficulties during that period.
The CCR, operated by the Central Bank of Ireland, stores personal and credit information on loans of €500 or more issued throughout the country. All financial institutions offering loans are required to provide loan repayment information to the CCR every month. This information is then used to generate individual credit reports for borrowers and lenders to access. Lenders can use these reports to assess a borrower’s repayment history and make informed decisions on loan applications. Lenders must request a person’s credit report if they are applying for a loan of €2,000 or more, while borrowers can request their own credit report to review the credit information submitted by lenders.
A credit report contains a summary of all active loans, including their value, outstanding balance, repayment frequency, repayment amount, number of missed or overdue payments, and the expected date of final payment. The same information is stored for closed loans. Data is supposed to be deleted after five years, but the system error led to the retention of data from three months in 2018 that should have been deleted. This data was mistakenly included in credit reports sent to lenders. Unlike credit systems in other countries, the CCR does not provide individuals with a credit score; instead, lenders base their loan decisions on the lending history contained in the report.
The error in the Central Credit Register is particularly concerning for individuals who experienced repayment difficulties in May, June, and July 2018. Prospective lenders could see this information in their credit reports when it should not have been included, potentially impacting their loan approval. The Central Bank estimates that between June 1 and August 7 of this year, there were approximately 476,000 inquiries made by lenders or borrowers for information held on the CCR. The bank’s preliminary analysis indicates that around 20,500 borrowers had performance data indicating repayment difficulties during those three months. However, the bank cannot determine the extent to which credit applications were adversely affected because a significant proportion of those borrowers continued to have payment performance difficulties in the months following July 2018. The Central Bank is currently investigating the number of borrowers who may have been affected by this error.
This is not the first issue with the Central Credit Register. In April, Bank of Ireland revealed that an error in the transfer of KBC mortgages to its systems resulted in the failure to submit customer repayment data to the CCR for February and March. Approximately 35,000 people were impacted by this error, and the resulting gaps in payments could have affected their credit histories and ability to borrow money. In a separate incident from 2018 and 2019, Bank of Ireland was fined €463,000 after the Data Protection Commissioner (DPC) discovered that thousands of customers’ data had been accidentally altered, potentially damaging their credit ratings and preventing them from obtaining loans. The DPC received 22 breach notifications from Bank of Ireland regarding the “corruption of information” sent to the Central Credit Register, with 19 of these incidents meeting the definition of a “personal data breach” under GDPR. Approximately 47,000 data subjects were affected by this breach.
The Central Bank of Ireland’s error in the Central Credit Register system has raised concerns about the accuracy and integrity of credit reports, which play a crucial role in loan applications. The bank’s investigation into the extent of the impact on borrowers is ongoing, and it remains to be seen what actions will be taken to rectify the situation and prevent similar errors in the future.