On September 21 2001 the Council of State, the highest jurisdictional body in public administration, issued a decision regarding a writ of mandamus about the infringement of a clean credit record. The decision states that once a person has met his or her financial obligations, information that classes him or her as a delinquent debtor must be removed from all databases so that he or she is not denied access to the financial system and to credit in general. Should such information be maintained a penalty will be levied upon the database holder.

This decision is significant in Colombia because it changes the judicial position adopted by the Constitutional Court in a decision issued on May 8 2000. This decision stated that it was reasonable for a person to be classed as a delinquent debtor on a database for up to two years after a debt was cleared if the debt was outstanding for over a year, or for double the amount of time that the debt was owing if this was less than a year.

While only the parties involved in the proceedings will be directly affected by the judgment, the Council of State's decision sets an important precedent for database handlers, financial entities and users of the financial system in Colombia. Because the judgment requires that records reflect the current situation of the individual concerned, updated information about an individual's new financial and commercial transactions will always be taken into account.

For further information on this topic please contact Luis Carlos Neira at Holguin Neira y Pombo Abogados by telephone (+57 1 312 2473) or by fax (+57 1 312 2513) or by email ([email protected]).