Swedbank accused of violating law by claiming client’s mortgage was “trade secret”

Swedbank, one of the largest banks in Sweden and the Baltic states, has been accused of unlawfully denying a client’s request for information on how their mortgage rate was calculated.

A complaint was filed with the Swedish Data Protection Authority (IMY) by the Vienna-based privacy group noyb, claiming that Swedbank is not transparent about its automatic interest calculation system.

While banks are allowed to set personal interest rates automatically, they are still required under EU law to provide “meaningful information about the logic involved” in the calculations made by such systems.

However, Swedbank refused a Swedish national’s data access request by arguing that the calculation was a “trade secret,” according to noyb. The group rejects such argumentation as a “creative” way for banks to circumvent their obligations.

People are entitled to know how their interest rates are calculated and this cannot be considered a trade secret under the EU’s Mortgage Credit Directive, which includes the equation to calculate mortgage rates, noyb says.

“The main thing people in Sweden talk about right now is the cost-of-living crisis. Mortgages are a big part of that, maybe even the biggest part,” says Joakim Söderberg, data protection lawyer at noyb.

“At the very least, banks should comply with their obligations under the GDPR and be transparent about how they calculate loans. Instead, they refuse to respect people's fundamental right to data protection.”

By insisting that the interest rate calculation is a trade secret, Swedbank “erodes what little trust consumers still have in them,” according to privacy advocates.

“It begs the question: How can we as consumers know we’re being treated fairly if we actually don’t know how we are treated?” Söderberg ponders.

Cybernews has reached out to Swedbank for comment.

In a complaint filed with the IMY, noyb has requested a “full investigation” of Swedbank’s rejection of data access request. It said IMY should order the bank to grant its client full access to how their mortgage rate was calculated and impose an administrative fine.

Swedbank should also establish procedures to adequately respond to access requests in the future, it said.