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Retail debtor “black list” to include data only for one year

The number of retail debtors on the “black list” of the Central Credit Information System (KHR) will decline considerably soon because, due to a December legislative amendment, the system's data will only be preserved for one year instead of the earlier five years.

The retail debtor “black list” includes borrowers defaulting by at least the amount of the monthly minimum wage (HUF 78,000 in 2011) for at least 90 days. People using false documents to identify themselves, giving false data, or committing bank card fraud are also placed on the list.

Until now, the data had to be kept on record for five years after the default was eliminated. Under the new regulation, the company managing KHR will delete debtors' data one year after the overdue debt is repaid. The data of those whose debt has been written off will still be kept for five years.

Róbert Nagy, president and CEO of BISz Zrt, the company managing KHR, told MTI that 13-14% of all retail defaults will be removed from the records as a result of the change by March 31, 2011.

At the end of 2010, KHR kept records of 929,000 borrowers. The number of defaulting borrowers rose 3.5% (31,000) in the last quarter of 2010, slightly down from the previous quarter (5.3%), but still high.

The number of borrowers in the records rose 18% (140,000) over one year and 50% (311,000) over two years. The difference was due to the rise in the number of borrowers with active defaults.

At the end of December, there were 768,000 retail borrowers with active defaults, up 4.3% (32,000) from the end of the previous quarter. The number of borrowers with active defaults rose 23.5% (146,000) over one year and 85.5% (354,000) over two years. (MTI – Econews)