Court Increases Compensation Tenfold for Wrongful Financial Blacklisting

The Provincial Court of Santa Cruz de Tenerife has set a major legal precedent by increasing a citizen’s compensation tenfold after they were wrongly blacklisted by a financial institution. The court ruled that the original 300-euro payout was far too low to cover the damage caused, raising the final amount to 3,000 euros plus interest.

The case began when the plaintiff was incorrectly added to a credit blacklist over a non-existent debt of 245 euros. These registries are used by banks to assess risk, and being listed can prevent people from getting loans or basic services. The court stressed that even a small, fake debt is a serious violation of a person’s reputation. Judges noted that compensation for such moral damage should be meaningful rather than just a symbolic gesture.

The ruling highlighted that the error was not a one-time mistake. The false information remained on the registry from February 2017, and during that time, two banks checked the file, damaging the individual's credit reputation. The plaintiff also had to go through a difficult, personal process to try and clear their name, which was only partially successful.

While the plaintiff originally asked for 5,000 euros—a figure supported by the Public Prosecutor’s Office—the court settled on 3,000 euros. The judges explained that while the initial 300-euro award was insulting, 5,000 euros was too high. This decision reinforces the right to privacy and reputation, sending a clear message that financial institutions must be held accountable for negligence in how they handle personal data.