What the Fair Credit Reporting Act Means for You

January 22, 2015

FCRA

The Fair Credit Reporting Act (FCRA) protects consumers’ and employees’ rights but few people outside of the legal profession understand what it means for them. The FCRA not only stipulates rights about credit reports but it also grants consumers and employees the ability to seek damages if their rights have been violated.

Fair Credit Reporting Act (FCRA) Protection for Employees and Applicants

The FCRA was created to assure accuracy, fairness, and privacy of credit information files. An employer may not perform a background credit check without advising the employee, or applicant, and obtaining his/her permission to do so.

Employers must also:

Explain that information contained within your credit file may be used in making employment-related decisions
Place this notice in writing in a stand-alone format, not within an employment application or contained within a larger document such as an employee handbook
Seek written consent from the employee or applicant before pulling the credit report

Can an Applicant be Turned down for Employment Based on a Credit Check?

In addition to making it clear to applicants that the information gathered can be used in employment decisions, under the FCRA employers cannot base employment decisions for either current employees, or applicants for employment, on the findings of a background credit check without first giving the individual a reasonable amount of time to review and dispute the information.

This becomes a multi-step process for employers and employees. If your employer, or potential employer, failed to follow these steps, you may be able to seek damages to cover any loss experienced from a negative employment decision.

Did Your Employer:

Notify you in writing in a document dedicated to just that topic that your employment may hinge on their findings?
Request written consent from you to pull the report?
Make you aware of any findings in your report that would negatively affect your employment?
Give you time to review and contact the various reporting services to clarify inaccurate findings prior to taking adverse actions against you?

Employers are required under the FCRA to provide what is known as a “pre-adverse notice” to those whose reports reveal information that would preclude them from employment, assignments, promotions, or make them subject to termination. This notice must be done in writing and include the contact information for the consumer reporting company, a statement that the reporting company did not make the adverse employment decision and thus cannot overturn it, a notice of your right to correct the inaccuracy, and the right to receive an additional free follow-up report in 60 days to ensure inaccuracies were addressed by the reporting company (if applicable).

Next Steps if Your Employer Violated the Fair Credit Reporting Act (FCRA)

If your employment has been negatively affected by misinformation on a credit report, or a potential employer didn’t follow the provisions of the FCRA, you may be eligible for compensation.

In addition to the rights protected under the FCRA, Florida has enacted several statutes to protect employees and applicants. In order to gain a better understanding of these rights and your protection under Florida law, contact a seasoned employment rights lawyer.

If your rights have been violated because an employer didn’t follow the provisions set forth by the FCRA, speak with one of our skilled employment rights attorneys at Wenzel Fenton Cabassa, P.A..

We’ll protect your rights. After all, we work for employees, not employers.

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Please Note: At the time this article was written, the information contained within it was current based on the prevailing law at the time. Laws and precedents are subject to change, so this information may not be up to date. Always speak with a law firm regarding any legal situation to get the most current information available.