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Fair Credit Reporting Employment/Housing Application

What rights do you have when applying for a job?

Whenever a prospect employer or employer reviews your application, they may require additional information about you to form part of their decision-making process. If they decided to seek information from a consumer background agency, they must comply with the legal obligations under the Fair Credit Report Act (FCRA).

What do you need to know before your background information is obtained?

Firstly, your background information is important to you and should not be obtained without written consent. Consent should not be given over the phone or in person. You should be provided with a disclosure and authorization form to review and sign. The disclosure and authorization form should explain in clear language the reason for the request and purpose for the background report. Your consent should be given freely. Your background report should be obtained after your prospect employer or employer has obtained your consent in writing.

Secondly, a prospect employer or employer should not include additional information or legal formalities such as waivers and liability disclaimers regarding other matters unrelated to the background report or about the terms of your employment. The disclosure and authorization form should be separate from all other documents and remain clear and conspicuous.

It is important to note that prospect employers or employer should not obtain a background report of you, unless the request is made in connection with the employment (permissible purpose). If you find that a prospect employer or employer has obtained background information about you for any reason unrelated to your employment, you may have a discrimination claim as well as a FCRA claim on your hands.

If a prospect employer or employer has fallen short of any other above, you will want to consult a consumer protection attorney who can assist you with this matter.

What is a permissible purpose?

  • Employment Hire
  • Transfer
  • Promotion
  • Reassignment
  • Retention

Once the prospect employer or employer has gathered your information from a creditor or consumer reporting agency and decides to deny your application. The applicant is entitled to receive an “Adverse Action notice”. The notice must be given before the rejection. The notice must include the following:

  • Information that the employer is about to make an adverse decision about your employment
  • A copy of the background report which was obtained by a third-party agency.
  • A reasonable time for the applicant to inspect and object to the third-party agency’s findings.

What is Adverse Employment action?

  • Denied a prospective job
  • Denied a promotion
  • Denied a transfer or reassignment
  • Lost job

How long do you have to inspect the report?

Federal Law provides employers to wait a reasonable time before actually making a definitive decision on the employment status of that individual. However, the Federal Trade Commission which oversees enforcement of the FCRA has recommended this to be 5 days between the pre-adverse action and the final adverse action.

The final adverse action notification must include:

  1. Name, address, and telephone number of the consumer reporting agency that supplied the report (including a toll-free telephone number established by the agency if the agency compiles and maintains files on consumers on a nationwide basis);
  2. A statement that the consumer reporting agency didn’t make the decision to take the adverse action and is unable to provide the applicant or employee with the specific reasons the adverse action was taken;
  3. A statement that the applicant or employee may dispute the accuracy and completeness of any information in the report with the consumer reporting agency; and

Why do you need a copy of your background report?

You need a copy of your background report, so that you can review and ensure that all the information within the report is accurate. If not, you should contact your employer or prospect employer regarding the inaccuracies within 5 days of receiving the notice and report.

What if you can’t prove that the information is inaccurate, but you know its inaccurate?

You can still inform your employer/prospect employer and ask them to give you more time to correct the information before taking adverse action.

What can you do to ensure that your background information is accurate?

You can contact a specialist, who can assist with any inaccuracies and consumer reporting compliance, so that you can confidently apply for alternative jobs.

What rights do you have when applying for housing?

If you’re looking at housing applications or want to renew your current lease, and decide to apply, upon receiving your application, the landlord may decide to run a background check through a company that accumulates background information. In doing so, your landlord must first obtain your consent and obtain the background report by certifying that the report is for a permissible purpose.

What is permissible purpose?

  • Renting housing
  • Renewing a lease.

Are Landlords required to take the same steps when obtaining my consent for the credit report?

Yes, Landlords are required to give written notice that they may request or have requested an investigative consumer report. The written notice must include a summary of rights, which include information for the applicant to request additional disclosures and a summary of the scope and substance of the report.

What adverse action may a landlord take?

  • Denying the application
  • Requiring a co-signer on the lease
  • Requiring a deposit that would not be required for another applicant
  • Requiring a larger deposit than might be required for another applicant; and
  • Raising the rent to a higher amount than for another applicant.

What type of report can be obtained about you?

  • A report from a background check company about your criminal history
  • A report from a reference checking service that contacts previous landlords or other parties listed on the rental application
  • A report from a tenant screening service that describes your rental history, and also includes a credit report.
  • A report from a tenant screening service that describes your rental history based on your previous landlords
  • A credit report from a credit bureau or affiliated company

Free Consultation — Contact An Experienced Lawyer Today

Contact an attorney at (800) 979-3707 for a free consultation and credit report analysis. We represent consumers throughout the nation from our New York office.

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