Hungary: new central credit information system


A new central credit information system known as KHR has been set up to improve the quality of credit information, and reduce the credit risk for banks and investment service providers.

The key events triggering a transfer of information to KHR by banks or investment service providers include:

  • when an individual continues to owe more than the minimum monthly wage for 90 consecutive days
  • when a customer provides false information or uses forged or falsified documents when entering into a contract for financial or investment services
  • any misuse of personal identification data in connection with financial or investment services
  • conviction of a criminal offence connected to the use of credit cards or other cash-substitute payment instrument
  • when a corporate or business client’s bank account records indicate a liability exceeding HUF 1 million (ca. €4,000) for more than 30 consecutive days.

The transfer to and processing of information by KHR complies with relevant data protection laws, including rules protecting customers such as:

  • being provided with detailed information by the bank or investment service provider about the scope of their personal data being transferred to KHR
  • ensuring that customers have appropriate rights to access and initiate the modification or deletion (as applicable) of any personal data held by KHR
  • providing customers with appropriate legal remedies if KHR’s operation breaches the data protection rules.

The Hungarian Financial Supervisory Authority has recommended that banks and investment service providers should amend their general terms and conditions of business to take account of these new data and client protection issues.

Law: changes to the Hungarian Banking Act and to the Hungarian Capital Markets Act, effective from 1 January 2006.