Information about the PayPal identity check and data exchange with credit agencies (credit check)

Last Update: December 18, 2018

What's an identity check?

Cashless transactions require reliable processes to verify the identity of all parties. To protect our customers from fraud and to comply with our regulatory obligations, we conduct identity checks.

By consenting to an identity check, you agree that we reconcile the personal information you entered (currently first and last name, street and house number, ZIP code and town/city, as well as birth date) with information obtained from third party credit agencies such as SCHUFA.

You can find detailed information about the categories and types of third parties we work with in our Privacy Policy on our website www.paypal.de and/or in the Privacy Policy for Payment Processing Services.

Another data exchange or a transfer of a possibly different address as part of the identity verification and storage of your data in the database of the credit agency will not take place without further consent on your part. For reasons of detectability the fact of the review may be stored in the database of the relevant credit agency for a certain time.

You can find more information on the website of the respective credit agency.

What's a credit check?

Some of our services require that PayPal makes payments to its customers without having been paid by the other party before (e.g. in the case of PayPal payments funded by direct debit or PayPal credit Services or when PayPal extends a credit to one of its customers, or you as a seller are not able to fulfill an order and we have to issue a refund to the buyer, we may not get a respective refund from your side). Some of our services encompass to do a credit check on consumers as a service to our seller customers who are extending a credit to their customers. It is part of PayPal’s promise to make funds available to recipients as soon as possible (by paying our credit funded transactions and to reduce the impact of payment holds and reserves to the business of our sellers). For these reasons and in connection with PayPal’s services above, we have to confirm the creditworthiness, willingness and ability of our customers to pay with a credit check. You can find a list of all credit agencies that we work with to obtain credit checks - where applicable - on our website www.paypal.de and/or in the Privacy Policy for Payment Processing Services.

Which information does PayPal transfer to the credit agencies when we request a credit check? Which information is stored by the agencies?

By consenting to a credit check and agreeing to our Privacy Policy, you release PayPal from any potentially applying bank secrecy obligations as follows, and you also agree to the transfer of the following information to third party credit agencies such as SCHUFA and/or infoscore Consumer Data:

Information to request a credit check: Name, title, birth date, address and financial information. (This information and the fact that it was verified can be saved in the agency’s database for a certain time period.)
Information on contract details: data about application for, taking out (in all cases, borrower and credit amounts or limits, and in the case of installment credits, the term and start of the installments) and processing as per agreement (e.g. early repayment, extension of term) of this credit.
If needed, information about non-contractual behavior on your part: PayPal may forward to credit agencies information about its claims against the customer for outstanding invoices, if you have not paid the due amount irrespective of the fact that it has fallen due for payment, if the forwarding is necessary to safeguard justified interests of PayPal or third parties, and if (i) the claim is enforceable or you have expressly acknowledged the claim, or (ii) after the claim fell due for payment, you received at least two written reminders and were informed by PayPal in good time, at the earliest, however, by way of the first reminder, of the pending forwarding after four weeks at least, and you did not dispute the claim, or (iii) the contractual relationship that forms the basis of the claim may be terminated without notice by PayPal on the basis of payment in arrears, and if PayPal has informed you of the pending forward. Furthermore, PayPal may also forward to credit agencies data about other conduct that is not as per agreement (e.g. fraudulent acts). This information will be saved in the agency’s database and can be used to calculate your credit score with the agency.
Additional information may be transferred, as explained in our Privacy Policy and/or in the Privacy Policy for Payment Processing Services effective at that time, to the extent that any updates to these Privacy Policies are binding for you.

No information about your level of income and financial circumstances, account balance or about individual transactions will be transferred to a credit agency when we request an identity check without your express consent, nor will your information be stored on file by the credit agency.

You can find more information about the credit agencies we work with, including their contact information and additional information about how your data is used by the credit agencies and your right of access to personal data in the appendix to our Privacy Policy on our website www.paypal.de and/or in the Privacy Policy for Payment Processing Services. Please also refer to the terms and conditions of the respective credit agency.

Which information does PayPal receive from the credit agencies when requesting an identity or credit check?

By agreeing to these conditions and our Privacy Policy for Payment Processing Services you allow us to obtain the following information from credit agencies:

Confirmation on your identity details, including your name, address and date of birth.
Information about your expected willingness and ability to pay in the form of a credit score, which can be based on personal and demographic information, financial information and credit history to predict the probability of default. To determine the score, the agency may have used demographical data on the basis of a statistical and mathematically recognized procedure.
Information related to your bank accounts (for example, we check if the bank account details match your name and address).

Please refer to our Privacy Policy and/or the Privacy Policy for Payment Processing Services to find out more about information we obtain from third parties.

Which other checks may PayPal carry out to mitigate risk and prevent fraud?

You can find detailed information about the individual agencies and other third parties we currently work with to mitigate risk, prevent fraud and increase the security of our services in the Privacy Policy on our website www.paypal.de and/or the Privacy Policy for Payment Processing Services.

SCHUFA information pursuant to Section 1.2 b) and/or a) and b) (SCHUFA FraudPreCheck and creditworthiness check)

“Data transmission to SCHUFA

PayPal transmits personal data related to the request for, performance of and termination of the respective business relationship to SCHUFA Holding AG, Kormoranweg 5, 65201 Wiesbaden along with data about non-contractual behaviour or fraudulent behaviour collected within the scope of this contractual relationship.

The legal basis for these transfers is Article 6(1)(b) and Article 6(1)(f) of the General Data Protection Regulation (GDPR). Transfers on the basis of Article 6(1)(f)f GDPR may only take place if this is necessary to protect the legitimate interests of the business partner or a third party and does not outweigh the interests or fundamental rights and freedoms of the data subject which require the protection of personal data. The data exchange with SCHUFA also serves the fulfilment of legal obligations to carry out creditworthiness checks of customers (Sections 505a and 506 of the Civil Code). This also includes fraud prevention.

SCHUFA processes the data received and also uses it for the purpose of scoring in order to provide its contractual partners in the European Economic Area and in Switzerland and, if applicable, other third countries (provided that the European Commission has made an adequacy decision in this regard) with information, inter alia, for assessing the creditworthiness of natural persons. Independent of credit rating scoring, SCHUFA supports its business partners by creating profiles for recognising conspicuous facts (e.g. for the purpose of fraud prevention in mail order transactions). For this purpose, inquiries from SCHUFA business partners are analysed in order to examine them for potential anomalies. In addition to inquiries from the past ninety days, this calculation - which is carried out individually for the respective business partner - may also include address data, information whether and in which function an entry on a person in public life with matching personal data is included in generally accessible sources, as well as aggregated statistical information from the SCHUFA database. This procedure has no effect on SCHUFA's credit assessment and credit rating scoring.

Further information on the activities of SCHUFA can be found in the SCHUFA Information Sheet or online at www.schufa.de/datenschutz”.