A negative blemish on your consumer’s credit report can have long-lasting effects, and make it near-impossible to purchase a home, lease a car, obtain a credit card, or secure a business loan.
The Fair Credit Reporting Act (“FCRA”) was specifically designed to protect consumers from the transmission or reporting of inaccurate information about them. The FCRA established credit reporting practices that place a high level burden on credit agencies to ensure the accuracy of the information they report. More importantly, the FCRA instituted severe penalties to any credit reporting agency that violates the FCRA.
Every consumer is entitled to review their credit report for free each year. We advise obtaining copies of your credit report from each of the three big reporting agencies, Experian, Equifax and TransUnion. Credit reporting agencies are required to investigate every single challenge that you raise to your report.
Additionally, while employers are allowed to use your credit reports during the hiring process, the FCRA imposes strict rules and procedures that must be followed. The failure to do so, can result in liability to employees and job applicants. Examples of employer violations are where (i) The failure to notify the employee or applicant that a consumer report is being obtained for employment purposes, and to certify that it will be obtained and used in a manner consistent with all applicable State and Federal laws; (ii) The failure to obtain the employee’s or applicant’s consent before obtaining the consumer report; (iii) The failure to provide a stand-alone document that notifies the employee or applicant of his or her rights and memorializes his or her consent to the background check. In other words, the notice/consent form cannot be part of an employment application or buried within the hiring forms provided by the employer; and (iv) The failure, before taking any adverse employment action based on a consumer report, to (1) provide a copy of the report, (2) advise the employee or applicant of the right to dispute the report, (3) provide information regarding how the dispute may be disputed.
Where these procedures are not followed, employees or applicants may have a claim under the FCRA, and may be entitled to damages, even if they are hired.
If you feel that your employer, or a prospective employer, has not followed the proper procedures relating to credit or other background checks, or if you are an employee that wishes to ensure that you are in compliance with this highly technical law, we are here to help.
If you feel that a credit reporting agency has either violated the FCRA or acted in any other way that is unfair, you may have multiple actionable claims and should contact us for a free consultation.