Commonly referred to as credit reports, a consumer report, as described by the Consumer Financial Protection Bureau “contains information about your credit – and some bill repayment history – and the status of your credit accounts. This information includes how often you make your payments on time, how much credit you have, how much credit you have available, how much credit you are using, and whether a debt or bill collector is collecting on money you owe. Credit reports also can contain rental repayment information if you are a property renter. It also can contain public records such as liens, judgments, and bankruptcies that provide insight into your financial status and obligations.”
The Fair Credit Reporting Act (FRCA) is a law from 1970 designed to give a consumer access to their credit report for the purpose of correcting willful and/or negligent errors. Since a 2003 amendment all consumers may request a free copy of their credit report annually. FRCA does allow an employer to check an applicant’s credit report after providing a disclosure to that effect.
Employers using consumer reports to screen job applicants or employees must follow specific procedures. They need your written permission and must tell you how they want to use your credit report. They must not misuse your information. They must give you an opportunity to dispute the information contained within your credit report before making a final adverse decision. You must receive a copy of your credit report if the employer decides not to hire or fires you.
In a recent case, Hebert v. Barnes & Noble, Inc., an employee won a case on appeal against her employer. The disclosure provided to her for her signature contained irrelevant information which obfuscated the purpose of the disclosure. Barnes & Noble cited a drafting error but the court decided, since at least one employee was aware of the added irrelevant information, or drafting error, Barnes & Noble willfully violated the FRCA.
If rights under the FCRA are violated, employees, applicants and consumers can recover actual or statutory damages, attorney’s fees, court costs, and punitive damages if the violation was willful. In the opinion of the United States District Court for the Northern District of Alabama, Brim v. Midland Credit Mgmt. Inc., “The threat of punitive damages under 1681n of the FCRA is the primary factor deterring erroneous reporting by the reporting industry.”
If your employer or prospective employer has accessed your credit report without your written permission, if you were fired or not hired due to erroneous information on your credit report, if the information obtained in the credit report was misused or your privacy was violated, contact our knowledgeable attorneys today.