The Mattacola Law Firm Blog

ARE YOU ADHERING TO THE FAIR CREDIT REPORTING ACT?

Posted in Law ::: May 6, 2009 9:57 AM

Employing quality individuals seems to be an ever more difficult task for employers.  The talent pool, quite frankly, is not deep and seems to be losing water fast.  Employers are smart to use every tool they can to weed out potential problem employees.  An employee's credit history is one of those tools.  If someone can't pay bills on time and has shown no responsiblity with their personal finances, is that person likely to be a quality employee?  These are useful things for employers to know. 

Yet, when an employer utilizes a credit report of a job applicant and makes a decision based on the information in that report, even partially, there are rules that must be followed per the Fair Credit Reporting Act (FCRA).  Yes, I know, those damn rules again.  Fortunately, I am going to give you a link to an excellent article by the Federal Trade Commission on this issue.  Here it is:  http://www.ftc.gov/bcp/edu/pubs/business/credit/bus08.shtm

Highlights include notifying a potential employee in writing when you are going to pull a credit report for employment purposes.  If you are relying on that report to take an "adverse action", i.e., denying a job application, you have to give the individual advance notice that includes the copy of the credit report and a copy of "A Summary of Your Rights Under the Fair Credit Reporting Act"  which is also by the Federal Trade Commission.   Yes, of course I will give you the link.  It is here:  http://www.uhd.edu/about/hr/forms/fcra_2.pdf

So, check out the article and all the requirements, it is extremely helpful.  Any questions, I am here.

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