The ABCs of Colombia's Credit-Reporting Fresh-Start Law (Part II)


Note: this article was originally published in 2021 and is kept here as a historical reference on the Constitutional Court's analysis of the credit-reporting fresh-start law.

What did the Constitutional Court say in Ruling C-282 of 2021?

At the time, only the press release was available, not the full ruling — but here are some of the relevant points:

The right to be forgotten: This law guarantees a real "right to be forgotten." "The Court highlights the need for negative personal financial information to have a defined expiration term, so as to guarantee the data subject a genuine right to be forgotten, protecting the subject's right, which would otherwise be affected by the unreasonable and disproportionate persistence of negative data in the relevant database or file."

On records held by credit bureaus: The law allows negative records to be removed for people reported to credit bureaus like DataCrédito. One of the situations where the right to habeas data matters most is the collection of information in databases built to establish risk profiles for users of the financial system.

The right to have negative data expire: While not explicitly stated in article 15 of the Constitution (Habeas Data), it follows from its core meaning. Without denying that credit bureaus play an important role in preserving trust in the financial sector and estimating credit risk, there must be a time limit looking backward, since it would be disproportionate to affect someone's credit life indefinitely over past defaults.

Data in circulation: Any data put into circulation must relate exclusively to the person's credit behavior. "Information must be accurate and truthful, and including personal data in databases is conditioned on that data being useful and relevant for calculating financial risk."

Setting limits: False, incomplete, expired, or outdated personal information in databases amounts to an arbitrary use of that data. It's necessary to place limits on how it's handled to protect Colombians' rights to privacy, honor, and good name.

Habeas data guarantee: The Court reaffirmed what it had already stated when reviewing the constitutionality of Law 1266 — that everyone has the right to know, update, and correct their personal commercial, credit, and financial information held in public or private information centers, whose role is to collect, process, and circulate that data to determine financial risk levels.

Conditional constitutionality: Although the Court found all the articles constitutional except for articles 4, 5, and 7, on which it made clarifications to bring them in line with the Constitution:

• On article 4, which added a clause to article 8 of Law 1266 of 2008, regarding the duties of information sources. The new clause sets out the duty to "report data subjects' negative information no later than (18) months after the obligation became due." The Court found it constitutional on the condition that this term starts counting from the date of default.

• On article 5, which amended paragraphs 1 and 2 of the article on the principle favoring an activity of public interest. Those paragraphs set out principles and objectives for managing financial information, as well as free access to it. The Court found the article constitutional, except for the phrase "except in the case of hiring in the financial sector" in paragraph 2, subparagraph 2, which was found unconstitutional for being discriminatory toward labor hiring in the financial sector, in violation of the right to equality.

• On article 7, which added two clauses to article 16 of Law 1266 of 2008 regarding requests, inquiries, and complaints; it was found constitutional except for the phrase "positive administrative silence" in clause 8, which was found unconstitutional, because the Court considered it unreasonable to apply that administrative-law concept — "positive administrative silence" — to private entities. Habeas data proceedings are governed by article 15 of the Constitution and by statutory laws such as Law 1266 of 2008, not by the administrative procedures that apply to the right of petition.

That said, the Court clarified that "in habeas data cases, silence in response to a request will be understood, for all legal purposes, as if the request had been granted" — which is different from petitions arising from an administrative process or procedure that ends in an express or implied administrative act.

Do you have questions about the effects of this ruling? Contact us on WhatsApp by clicking here

At Consejurídico #WeWantToBeThere

Source: Constitutional Court Press Release No. 032 of 2021.

El asistente jurídico digital de Jurídiconline analiza tu situación específica. La revisión inicial es gratuita.