With many customers complaining, Bank of Albania threatens to end access to credit score database for banks found guilty of misreporting information into the 2-year-old registry.
TIRANA, Dec. 9 – If you bank in Albania and have an impeccable credit history, your credit score might still not be safe, and the culprit is a surprising source.
Some Albanian banks are purposefully giving their best client bad credit scores in the national credit registry so they can’t switch to another bank, according to an investigative report in the Albanian daily newspaper, Shqip. They are also giving their worst clients impeccable credit scores, according to the newspaper.
Banks are doing this strictly for competitive reasons, according the newspaper’s sources.
“They spend money to identify a regular customer and good client, so in order not to have them leave the bank, they report them as bad customers,” the newspaper wrote.
Two years ago, Albania’s central bank put into operation an electronic record for credit scores.
Many people became concerned about the fact that the exchange of information between banks may lead to restriction of competition and violation of client privacy.
Many people have complained that their information in the registry is wrong.
When problems surfaced with the majority of users earlier this year, Bank of Albania amended the relevant regulations and created a mechanism under which the customers disappointed by the classification in the database, could complain to the central bank.
The new regulation came into effect on August 15, but contains no penalties for banks that report the wrong data.
However, Bank of Albania does say that will suspend the access to the registry to banks that report the wrong data.
The new regulation was never advertised and only a small group of Albanians know of its existence.
Established in 2007, the register of loans aimed to facilitate analysis of the cost that a new client for second tier banks and credit agencies in the country. Theoretically, a customer who has a relationship with banks and has a clean record, must obtain cheaper loans, because that carries the lowest rate risk. The register contains the names of more than 200,000 Albanians who took a loan over the past five years.
Facing these problems, banks are taking the registry data with a grain of salt. Some have returned to the old method of assessing the financial situation of clients – but that assessment carries unnecessary costs for clients, as well as banks.
There is an appeal method clients can use to complain about their score with the Bank of Albania.
The can get access to review of the data for themselves and ask for changes to the registry. This request must be submitted by the customer or by another person authorized in writing by the customer.
Although the banks must review the data for the client complaining within five days, there is no penalty set for the banks for not doing so.
