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Mary Wise asked:




If you are an employer using credit reports for background checks or hiring services from third party agencies that use these procedures, you should make sure that the federal credit report act is being complied fully as otherwise you may face serious legal consequences that may cost you a lot of money on the long run.

Many new concerns have appeared after the sad events of our recent history. Security has become a serious matter and thus most employers want to cover themselves from future difficulties. However, the thin line that separates security from privacy should not be crossed or else, the employer can be liable for violating the mentioned act.

Criminal Background Checks

The numbers are amazing, 80% of companies human resource management confess that they run criminal background checks on their candidates due to the security concerns, 10 years ago, that number was only around 50%. Thus, it is not crazy to think that credit checks have risen similarly or even more.

The candidate credit standing, credit capacity, and personal characteristics are usually included in investigative consumer reports that can be ordered by employers for the purposes of hiring personnel, promoting personnel, reassigning or retaining personnel. It is always necessary, however, to protect people’s privacy or else, the legal consequences may be disastrous.

Proper Procedure

In order to access and order a consumer report including background criminal, credit and personal checks an employer must make it very clear to the applicant that these investigations will take place. There must be a written authorization signed by the applicant in order to pursue with such research programs. This disclosure must be a separate document stating only this information as clearly as possible.

Only then the employer may request a report on the candidate attaching the signed disclosure to the report requirement. However, even with the disclosure, if the information is used in violation of any equal employment opportunity legislation, the consequences of that violation will apply. Thus consulting with a legal advisor about the dos and don’ts is always suggested.

If an employer rejects a job application based on a report, then the employer must, before actually doing so, provide the candidate with a copy of the report, and a description in writing of the individual’s rights under the Fair Credit Reporting Act. Credit bureaus are obliged to provide all this information on requirement to any individual that wishes to know what information is included on their databases that may affect job or credit opportunities.

Any employer wishing to know the background of their employee’s candidates should be extremely careful with the tools used for doing so as this can have serious legal and thus economic consequences. Lawyers are preying on those who fall into the temptation of choosing personnel in violation of equal employment opportunity legislation.

Ruby