Credit check for employment?

[leigh6000]

I would like to know if it's legal for potential employers to run a credit check on people they are considering for a job? I am not talking about a bank job or anything involving finance. Just a retail management position.

My husband lost his job a couple of years ago due to downsizing. He went for months before he found a job and when he finally got one it paid several thousand dollars less a year. He has been continuing to look for a better paying job but they are few and far between here in Ohio. In the mean time our once good credit has fallen apart.

The last two jobs he interviewed for (and thought he had a shot at) ran a credit report on him and immediately terminated the process.

I am wondering if this is even legal. He did sign a form giving permission, but are they even allowed to ask? I told him to refuse. I personally do not believe our finances are anyone's business. I can't believe they have even asked. They could run a criminal background check on him, call any of his former employers, and his references, but the first thing they do is run a credit report. That says nothing about his work ethic or how he does his job. It's sickening. He is a wonderful manager. He has taken two different stores that were so in the hole that they considered closing them and in less than a year not only gotten them out of the hole, but brought in a profit and cut their shrink considerably. He would be an asset to anyone who would hire him, but they are not even giving him a chance.

We are never going to get out of the hole if no good paying jobs will hire him because of our credit.

 

[calalily]

Not Illegal

The company did nothing illegal but have specific procedures to follow. Obtaining written permission was the first step. Read the following:
This is an excerpt..too long to attach all of it here.
From the Federal Trade Commission: Facts for Business
http://www.ftc.gov/bcp/conline/pubs/buspubs/credempl.htm

As an employer, you may use consumer reports when you hire new employees and when you evaluate employees for promotion, reassignment, and retention — as long as you comply with the Fair Credit Reporting Act (FCRA). Sections 604, 606, and 615 of the FCRA spell out your responsibilities when using consumer reports for employment purposes.

Key Provisions of the FCRA Amendments
Written Notice and Authorization.
Before you can get a consumer report for employment purposes, you must notify the individual in writing — in a document consisting solely of this notice — that a report may be used. You also must get the person's written authorization before you ask a CRA for the report. (Special procedures apply to the trucking industry.)

Adverse Action Procedures.
If you rely on a consumer report for an "adverse action" - denying a job application, reassigning or terminating an employee, or denying a promotion — be aware that:

Step 1: Before you take the adverse action, you must give the individual a pre-adverse action disclosure that includes a copy of the individual's consumer report and a copy of "A Summary of Your Rights Under the Fair Credit Reporting Act" — a document prescribed by the Federal Trade Commission. The CRA that furnishes the individual's report will give you the summary of consumer rights.

Step 2: After you've taken an adverse action, you must give the individual notice — orally, in writing, or electronically — that the action has been taken in an adverse action notice. It must include:

the name, address, and phone number of the CRA that supplied the report;
a statement that the CRA that supplied the report did not make the decision to take the adverse action and cannot give specific reasons for it; and
a notice of the individual's right to dispute the accuracy or completeness of any information the agency furnished, and his or her right to an additional free consumer report from the agency upon request within 60 days.
Certifications to Consumer Reporting Agencies.
Before giving you an individual's consumer report, the CRA will require you to certify that you are in compliance with the FCRA and that you will not misuse any information in the report in violation of federal or state equal employment opportunity laws or regulations.

In each case where information in the report influences your decision to deny promotion, you must provide the employee with a pre-adverse action disclosure. The employee also must receive an adverse action notice once you have selected another individual for the job.

Non-compliance
There are legal consequences for employers who fail to get an applicant's permission before requesting a consumer report or who fail to provide pre-adverse action disclosures and adverse action notices to unsuccessful job applicants. The FCRA allows individuals to sue employers for damages in federal court. A person who successfully sues is entitled to recover court costs and reasonable legal fees. The law also allows individuals to seek punitive damages for deliberate violations. In addition, the Federal Trade Commission, other federal agencies, and the states may sue employers for noncompliance and obtain civil penalties.

For More Information

The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint or to get free information on consumer issues, visit www.ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters Internet, telemarketing, identity theft and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

FEDERAL TRADE COMMISSION FOR THE CONSUMER
1-877-FTC-HELP www.ftc.gov
March 1999

www.ftc.gov/donotcall www.consumer.gov/idtheft www.ftc.gov/spam

 

[leigh6000]

Thank you. I was sent that same info from someone else after I posted. They did ask his permission and he signed their form, but nothing further. The first potential employer just didn't call back. The second one sent him a letter stating that they had "no position for him at the present time". If he has approached them looking for a job, that might have been fine, but this particular employer found my husband's resume on Monster.com and contacted him. I find it very hard to believe they found his resume so good they wanted to contact him to interview him for a potential job, then after they get permission to run a credit report, the job is all of a sudden no longer there.

There was nothing sent to him in regard to the reason they didn't want to hire him. Just stating they had nothing for him which makes no sense. I'm sure there is a possibility they just didn't like him when they met him in person, but to be totally honest, I truly find that hard to believe. If they didn't like him enough to consider hiring him during the interview, why even ask for his permission to run a credit check. I would have just thanked him for his time and sent him on his way.