Denied a job because of a consumer credit check?

[eppur_se_muova]

Unfortunately, this is becoming increasingly common. Here's an FTC ruling on such a case, from 2004:

Job Applicants Not Informed of Their Rights under Federal Credit Law, FTC Alleges

Bad Credit Lowered Consumers’ Odds for Casino Jobs

Two casinos denied consumers jobs based on their credit reports, without informing them of their rights under the Fair Credit Reporting Act (FCRA), according to the Federal Trade Commission. The defendants have agreed to pay $325,000 in civil penalties and are barred from future FCRA violations.

According to the FTC’s complaint, Las Vegas-based Imperial Palace, Inc. (d/b/a Imperial Palace Casino) and Biloxi-based Imperial Palace of Mississippi, Inc., ask job applicants to sign a release form authorizing the defendants to obtain the applicants’ credit reports, then review each credit report and use a “Background Form” to rate the applicant as either “Poor,” “Fair,” or “Good.” Based on this rating, the applicant then is recommended as “Favorable” or “Unfavorable.” The FTC alleges that, in many cases, the defendants’ decision not to hire a particular applicant was based wholly or partly on information contained in his or her credit report – the FCRA defines this practice as “adverse action” against the applicant.

The FCRA requires that before taking adverse action against a current employee or job applicant based on information in the individual’s credit report, the employer must give that individual a copy of the report and a written description of his or her FCRA rights. After it takes adverse action, the employer must provide the consumer: (1) notice of the action taken; (2) the name, address, and phone number of the credit bureau from which the report was obtained; (3) a statement that the credit bureau did not make the decision to take the adverse action and cannot provide specific reasons why it was taken; (4) notice of the consumer’s right to obtain a free copy of his or her credit report within 60 days; and (5) notice of the consumer’s right to dispute the accuracy of the information in his or her credit report with a credit bureau. The FTC charges that the defendants failed to provide applicants with the required notices.

The proposed consent decree bars the defendants from taking adverse action against current employees or job applicants based on information in their credit reports without providing the FCRA-required notices. The decree requires the defendants to pay a civil penalty of $325,000. The proposed decree also contains standard recordkeeping provisions to assist the FTC in monitoring the defendants’ compliance.

The Commission vote to refer the complaint and proposed consent decree to the Department of Justice for filing was 5-0. The complaint and consent decree were filed on July 13, 2004 in the U.S. District Court for the District of Nevada by the Department of Justice at the request of the FTC.
***
more: http://www.ftc.gov/opa/2004/07/imperial.shtm

It's not against Federal law to require a credit check on job applicants; some states have stricter rules. But the FTC makes it plain that if you are denied a job because of this check, without being provided with the prescribed information, you have grounds to bring charges.

edit for miswording

[Tab]

1. Well, I can see if you were in hock to the Mob...

but it's not like the Mob reports to Equifax...

[Regret My New Name]

2. I was recently rejected from a job because of my credit...

sadly they complied with the law... :P

I wish I didn't screw up my credit...

[Gormy Cuss]

3. I wish your credit report didn't screw you.

The use of credit reports as character witnesses has really gotten out of hand.

[Raspberry]

5. There can be good reasons for their use

I work at a bank. Someone who has had financial difficulties may find the temptation of having a drawer full of cash a bit too hard to resist. Same goes for casinos. Or pretty much any retail position.

[Polemicist]

8. Complete nonsense....

But that sentiment does sum up the group think of the financial industry.

The actual truth is those with bad credit aren't necessarily more likely to steal. If credit is an impetus for theft, then those with excellent credit, when confronted with difficulties, would be more likely to steal in order to preserve their status.

Instead of poor credit, high debt loads with perfect payment records are the real risk factors for theft. If you already have bad credit, you simply have little left to lose.

I've spent the last 20 plus years of my life in the financial industry and know that those perched on the edge of the credit abyss are the ones most tempted or motivated to act improperly. And credit isn't a reflection of character, more often it's a reflection of circumstances. Desperate actions occur prior to the fall, not afterwards.

[smokey nj]

13. I wish I could recommend this post.

I worked in human resources for a retail company that used credit checks to screen employees - it was the part of my job I hated the most, and I REALLY hated that job. A few years after I left, I saw on the local news that their chief marketing officer was arrested for embezzlement. Apparently he'd stolen a shit load of money using phony vendor invoices. I'm pretty sure he had perfect credit.

[northernlights]

14. great, well that's just effing great

I'm having a background check done right now for a tentative job offer with a financial co.

I have very good credit. Payments all made on time. Mortgage paid off. I do have student debt, though.

I reeeeelly hope I don't get rejected because of a good credit rating plus some student debt. x(

[smokey nj]

17. As long as you're paying your student loan as agreed you shouldn't have any problem

[eppur_se_muova]

37. And if you've been employed for a year and can't make even minimum payements ...

no job for you.

[smokey nj]

39. I'm not defending the practice - I think it stinks to high heaven.

I was just addressing the poster's situation.

[eppur_se_muova]

42. Just commenting. Not blaming you. nt

[northernlights]

41. I'm still in school so the loan payments haven't begun

And they won't begin for some time.

The job is part time and the schooling is part time. Loan repayment starts after I graduate in about 2 more years.

In the meantime, I have a 35 year old credit history of paying on time, have long since paid off the mortgage, use 1 credit card as a convenience and pay it off every month, and so on...

And the background checker just checked my credit for the 2nd time. A week ago Friday with Equifax. Last Thursday with the other one, not Experian.

[lib_wit_it]

31. Excellent point! Those are the ones who do the most damage.

[lib_wit_it]

30. And what about those greedy bastards who don't have any financial problems at all, except for the

problem of being rich greedy bastards who just want to steal money so they can be richer greedy bastards. They steal enough money to make up for scores of small time thefts, and they almost never seem to be saddled with the "poor credit" label.

[Gormy Cuss]

19. And how did banks screen for this before they had access to credit reports?

Just wondering. Has loss prevention really been reduced specifically because of screening out applicants with bad credit?

What about current employees who have a reversal of fortune-- are the employers repolling credit data every month and firing employees with newly lowered scores?

[Merlot]

26. I disagree.

Some people will steal, some won't no mater how much they need the money. People with lots of money have been known to steal even more money.

But classifying poor people as thieves is very helpful to the rich thieves and corporations.

[rhett o rick]

44. Hey i totally agree. People that have had financial difficulties should be thrown directly in jail.

In fact, I bet you'd be interested in Hitler's final solution. Just get rid of the deadbeats.

[hobbit709]

46. But they're using them for jobs that do not involve touching money.

THAT is the problem. It's become a general weeding out tool for companies instead of checking references.

[lib_wit_it]

9. I think it's total bullshit! My sister was denied a job due to bad credit, and when she told me

about them even having the right to check it, I thought she was misinformed or joking.

[Statistical]

24. Well they can only check it IF she gives permission.

If you give anyone permission then they can pull your credit.

[lib_wit_it]

32. And if she denies them permission, you think she's gonna have a chance in hell to get the job?

[Regret My New Name]

23. Well... I don't fault them much.

This position was working with financial related stuff. That I understand and deal with. I don't really get it when it comes to jobs that do not involve money at all. I know someone who was turned down for a technical support job because of her credit. That just seems a bit nonsensical to me.

[lib_wit_it]

29. I think that sounds like RW thinking--people in dire financial straits may know very well how to

manage money, and would do so quite well at work, but lost a job and found it was a way to pay bills, provide necessaries, etc., hoping they'd get a job soon enough to repay.

Imagine they did not choose to be poor.

You can debate what may have been "necessaries", but imagine a case in which the person did all they could to avoid using credit they weren't 100% positive they could repay, but was left with no other options than to use the plastic and hope for the best. And then the worst happens instead.



Imagine that this same person has done everything correctly in their past "jobs" dealing with finances. And the thing they need most to get back on track in their personal finances is a fucking job.

[Regret My New Name]

40. Well, maybe...

I know in my case it's for sure a valid reflection on my poor personal responsibility management. Of course that is just in my case, and I'm sure there are plenty of people who simply had a run of bad 'luck', with little fault of their own. Although, in my case, I have decided I need to stop being such a wanker, and am trying to correct my situation... It would for sure be far easier if I got that specific job, but ehnn.

*I probably shouldn't put that in my cover letters, huh? :P

[coalition_unwilling]

28. Who was the company that rejected you? I will make a

point of not buying their product or service and will not seek employment with them.

[imdjh]

4. I have a better idea- make it illegal to even ask someone for permission to see private information

I confess, I have signed a lot of boiler plate. For all I know, Chase Bank can legally take my first born if I continue to use my card. God only knows what Steve Jobs has my permission to do, because he has me signing "user agreements" with every update of iTunes, Safari, OS, and a dozen other programs.

Make it illegal to use credit report info for anything other than obtaining credit. Period. Makes sense to me.

[JANdad]

6. +1

Hear Hear!

[RaleighNCDUer]

12. Well, that's just silly. That would be like restricting the use of your

social security number to Social Security and the IRS.

[Gormy Cuss]

20. +1

I'm so old that my first Security card looked like this:

[lib_wit_it]

33. Right. and those 957 page TOS agreements ought to be outlawed, or at least be required to be

annotated with clear language, large font call outs of the conditions that would be of most concern to the average Joe.

[Control-Z]

7. I fail to understand

how a credit report can be used to rate an applicant for employment and not be considered discriminatory. I have never met a single person who "screwed up" their credit rating on purpose. What I have known are people who have lost jobs, had medical emergencies, divorced, lost a spouse...

This is just another way of keeping the unfortunate down.

[imdjh]

10. All they have to do is show correlation.

Any job which MIGHT involve driving a company vehicle requires the company to have insurance on those vehicles and the insurance companies say they can prove that people with better credit scores have fewer accidents. People with good credit scores might be less likely to drink heavily (yeah right) or something like that. ALl they have to have for back up is some evidence that the credit score is relevant.

[Polemicist]

11. It's actually retribution....

Banks are assholes. If they believe you have screwed them by not paying them back, they want to extract a pound of flesh from you by ruining your credit rating. Bad credit reporting is simply getting even.

Credit bureaus were originally owned by banks and merchants. They began as credit co-operatives between banks, financial companies, and merchants. Their rules and regulations are well entrenched from their origins and remain in place, even after these organizations grew and became independent from their origins by becoming stock companies in their own right.

They say they are "exchanging information" to reduce risk. But that's only half the story. They are also punishing the economic underclass and strictly enforcing their version of economic intregrity. You know, they can rape the public for excessive profits, but if the little guy tries to get away with anything, the system will take revenge.

The classic uneven playing field.

[Hippo_Tron]

16. Banks don't want you to pay them back because that's how they get to charge higher interest

If you pay your credit cards off in full every month they don't make any money.

[depakid]

18. Not just banks- but any business who claims that you owe them money

whether they have a provable case in court or not.

[lib_wit_it]

34. Thank you , you made a point I tried to make, but you worded it much better. I should have

read all the posts first, but was too irritated with the seemingly RW thinking being espoused here.

[Medusa]

15. It may not be fair

but apparently it is legal until someone challenges it.

I can see why some employers would do it, particularly a bank or a casino.

[Blue_Tires]

21. i'm willing to bet i lost out on a job at some point because of that

[earthboundmisfit]

22. It would be interesting to contact the ex-potential employer after this happens

And voice your concerns that their access to your personal information may be used to commit identity theft. After all, even though your application is shitcanned, they STILL have all your info...

[Control-Z]

25. I am no longer the scared, cooperative little

girl I used to be. I am willing to refuse all kinds of information that I used to believe I had to disclose. A credit report? I don't know that I would agree to it. It seems like it could be used not only to decide against hiring a person, but to lower a starting rate of pay, or anything, for that matter, that would work to the advantage of the employer.

I did feel a bit put out with the information (including background check) required for my teaching credential. I can't remember if a credit check was done. I did, however, understand the need for the background check.

[earthboundmisfit]

27. Right, criminal background checks are one thing

Someone's financial history is another, unless it is directly connected to one's ability to perform the job. A credit check, if there are, say, unpaid medical bills which could also even give clues to one's health history, which could prove prejudicial in selection of an applicant.

[ohheckyeah]

35. One job I applied for wanted

to access all my medical records. I don't think so!

[derby378]

36. I'm going to push for the Texas Democratic Party platform...

...to include a push to criminalize the use of credit checks as a prerequisite to employment in Texas, with a possible exception for certain sensitive jobs in the financial sector.

[SoCalDem]

38. No surprise at all.. Jobs are a hot commodity right now

and if you are an employer and you have a job to fill, you want the best possible employee.

If you have a choice between 2 people:

One has a 780 FICO score, no debt, and fits the job description

the other has a 420, a bankruptcy, and debt out the wazoo

which would YOU choose?

They both might be equally honest, but a person hiring them has no personal knowledge about them.


It's a mean thing to be sure, but it is what it is.. and companies do this all the time.. it's used when people buy car insurance, or even open a bank account.

[Echo In Light]

43. No worries. They can safely count on most job seekers not knowing/not fighting back

In other words, All American.

[BadgerKid]

45. Asking is a way to test for attitutde/compliance

by soul-eating employers.

[bridgit]

47. Casinos are mentioned here. When the relationship between any possible gambling...

problems or money problems an applicant has had or may have, which can be seen in a CC in the patterns of credit being used and acct balances outstanding - could give HR peeps pause as to graft, theft, 'entry/back door' stuff), how much plastic, late payments, etc. Casinos most always have a hotel on site. Even housekeepers move amongst people's personal effects. If you've seen the youtubes that stuff is scary enough plus they've been tagged lifting money & property - not good for business,

The people that cart the money into accounting are gone over with a fine tooth comb if they don't know you already. Casinos aren't going to put the hands that ran up a defaulted $35,000 pile of plastic onto a cart full of money on wheels...I wouldn't advise them to do it either

If the casinos were doing it internally on the sly then they're fucked. The credit reporting agency usually sends out notice. I'd like to see the follow up here. If the casino has to adhere to a judgment, they'll send in a pod of Armani sharks with Gucci briefcases and fill the court with smoke and mirrors