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Will Your Credit Report Disqualify You For a Job?
coondoggie writes "Two companies that fired workers and rejected job applicants based on background checks, without informing those people of their rights, have settled with the FTC for $77,000 in civil penalties. Most experts we talked to think this case is just the tip of the iceberg. The companies — Quality Terminal Services and Rail Terminal Services — were charged with violating provisions of the Fair Credit Reporting Act, which requires employers to get permission to look at individual credit reports. If you don't get a job because of information in your report, the employer must show you the report and tell you how to get a copy from the consumer reporting company. There is no charge for the report if you request it within 60 days of getting notice that you did not get a job."
This has been going on for a long time. In 2001, Vulcan (Paul Allen's company) withdrew an offer because I had too many parking tickets (~$1000) on my credit report (parking tickets are a fact of life if you work in downtown Seattle). Paying the tickets wasn't enough, and the offer was withdrawn.
busy, busy, busy
This is a slippery slope you're walking. Assuming that you want to demand that employers have concrete reasons to deny you a job, you must give them access to your medical history as well as the history of your family? Sure, they can't deny you because they can only show a correlation between bad credit and bad job performance, but then should they be able to dig deeper into the reason for your bad credit?
If you are going to prevent them from accessing personal information, where does this stop? Can they request job performance information from your previous employers? Should they even be able to ask you questions in the interview, and if so, can they reject you on the basis that you refuse to answer a question?
If you think that an employer can't do due diligence on a hire, what can they do?
An employee who is frequently ill or absent due to injuries sustained in his private activities is a liability. However, I would be uncomfortable allowing a company to access his medical records searching for causation. I'm much more willing to allow the company to make judgments based on correlations which tend to be fuzzier and allow for some flexibility in interpretation.
Once again, corporations are not people, but they want human rights. Their bottom line is their self interest, and people are their biggest liability unless they are proactive. Screw the employees and the customer; shareholder dividend is the goal, whenever possible, and permissible by law. Its seems peculiar that this company is shrewd enough to perform the illegal research, and yet, somehow incapable of following procedure, or limiting their legal exposure. Hmmm... I wonder if perhaps some of the employees that successfully passed that background check are really quite enjoying themselves now..... or maybe I'm just a wee bit cynical and mistrustful of corporate power in the hands of people.
The whole idea behind credit reports being used for anything other than whether or not you should be extended credit leaves me sickened.
In fact, if you get paid in arrears, or if you put anything on expenses, then it's you who is lending to your employer. So need to do the credit check on them!
You see, this is one of the good reasons there is the Swiss bank secrecy system. It is no-ones business how much money you have or owe! (but there needs to be a system that makes sure you pay your taxes). It is really a pity that US citizens are not allowed to use it anymore...
Hell, there is something far more sinister than that. Some of those marks on your credit report can be *disputes*. Honest to God disputes. Errors even.
I can't understand how credit reports are even legal. I checked a few years back and the policies of one of the credit agencies was basically this.... you could make a *single* negative mark against a credit report electronically. Positive Marks? Minimum ONE THOUSAND AT A TIME.
The whole system is violation of due process, and The Constitution. It allows corporations to exact punishment against you, threaten you, coerce you, etc. all outside of a courtroom. Arbitration is not even involved. Just an electronic transaction in a database. All of it with a difference in the levels of sophistication, power, influence, etc. between consumers and companies.
The TSA has a policy where they will threaten their workers if they have bad credit. That's farking duress. I know personally of several employees who paid of Sprint cell phone scams (cell phone bills for service that never existed. Google it) for $100-$200 out of FEAR. Not fear of those scam creditors, fear of the TSA canning their asses over a couple hundred bucks. I should post the letters on WikiLeaks. Full of very threatening language and when they list the options, *nowhere* is there an option that you just can't afford to pay the amount owed. They certainly make it sound like if you can't get the collection agency to agree to something, anything, then you are at risk for losing your job.
The threat of being fired, interests rates going up, not being able to afford ever increasing lines of credit needed to just keep your family above water, all contribute to a very real mechanism in which these corporations can control you. Most people will be afraid and take the path of least resistance, hence the control realized.
This is just the next evolutionary step in the system. The corporations and credit agencies will create a system where they can *control* you without ever spending any resources hiring law firms and going to court.
The Constitution was just a speed bump.
Who is most likely to steal from you: The worker who owes 20k dollars in credit card debt and is barely keeping his head above water, or the worker who has a million dollar home and a penchant for finding profit everywhere?
I've found that a lot of people who are in poor financial condition are so because they're weirdly principled about it. They don't feel like they could go for higher salaries, because that would be wrong. They don't feel right about charging for the things that they do. They have specific hangups about money in weird ways, one of which frequently is "money is bad, and getting money is bad. I should just put my nose to the grindstone and everything will be OK."
Whereas a lot of the people I know who do have a lot of money, do so because they're unscrupulous bastards. They know how to cut corners, squeeze full advantage out of situations, and pull the wallet right out of your pants while smiling and making you feel like one of the family. I like the ones that I know, but I also know better than to sign anything around them.
I think it's fair to say that in this case, a Credit Score is not a good indicator of which type of employee will take advantage of "edge opportunities" in your organization. And in that light, it merely discriminates against the kind of suckers, err, "hardworking employees" that you probably do want in your company.
The ______ Agenda
That info MIGHT be pertinent to a job application but TFS indicates people were also fired from an existing job because of their credit rating. Personally I would be fucked-off to the point of quiting if my employer started ordering regular credit checks on me AFTER I already had the job.
I say "might" but really I can't see it being much use other than a crude process for HR to filter out obvious morons, a first class thief/fraudster will have impecable records and refrences.
Disclaimer: The option of spitting the dummy and quitting is relative to one's circumatances. As a vetran proffesional I have amassed a large fuck-off fund that would last me several years, I also have an excellent credit rating (now that my "sins" are too old to be on the records). I can afford to tell a petty-minded employer to go jump, the vast majority of people (such as my adult children) don't have that luxury.
And did you exchange a walk on part in the war for a lead role in a cage? - Pink Floyd.
How about just paying for something with money you actually own in stead of using credit for everything? It's pretty hard getting screwed like that and it seems to work in the rest of the world...
Greetings and salutations...
Let me address this...I have spent MOST of my life paying cash for my purchases. Know what that has done for me? Made it IMPOSSIBLE to get a credit card of my own, because I don't show up in the credit reporting agency database. It is nearly impossible to get a loan, and, I get a lot of strange looks when I buy large ticket items. Apparently, the picture of reality in MOST folks minds here in America is that anyone who pays cash for something must be a drug dealer, trying to launder some money.
All right...before anyone else points it out, I COULD get a "secured" credit card, by depositing the amount of cash that I wanted "credit" on. However, how does that differ from a Debit Card? In my mind, not at all. So...after 40 or so years of paying cash for everything, I am forced to get someone else to get a credit card FOR me, under THEIR account. Does that make sense?
Pleasant Dreams.
Dave Mundt
YAB - http://blog.beemandave.com/
Security Clearances are getting yanked over poor credit these days, because someone with a poor credit background allegedly would have a motive for selling secrets solely so that they could pay off their debts. There was a huge story a few years back about a janitor who had been at one facility and had a clearance for decades lost his job and clearance because his credit score went down. (I'll have to search around and see if I can find it.) I know some great responsible people (now) who can't get a clearance because of some stupid credit card bill from their wild youth days.
My guess is that the TSA is checking the credit of their employees periodically and threatening to yank their clearances, which would also yank their jobs. Maybe they should be firing the ones who steal stuff from my suitcase instead..... oh wait, they have no way of knowing who that actually was.
Dumb.
--Insert catchy
After my divorce, I discovered that the wife inherits any bad credit from the marriage, but does not inherit a good credit rating. I kept my married name since I had also had a small business as well as an online presence in that name. I had a valid driver's license, and took the joint Sears store card with me, since I had a laptop under warranty from Sears, as well as a car which was registered in both our names. We had purchased several cars, a house, and had numerous store and bank credit cards for more than 20 years with never so much as a late payment; I had no credit rating at all after the divorce. I could not open a bank account even though I had a steady job at a local university, I could not get a phone. The university was very unhappy about cutting a check for my pay, they normally used direct deposit. I had to deposit my check in a trusted friend's account, or else use a store front check cashing service for a horrendous fee. I also paid my friend's phone bill by check for six months, then was able to transfer the friend's phone into my name while the friend got a new one. The friend and I were able to get a "bad-credit" secured credit card from the friend's bank in both our names, eventually transferred into my name alone and upgraded to a more normal low-limit unsecured card. I made a point of using it at least once a month, and only making the minimum payments. It took nearly a year before I finally showed up on the "credit rating" radar.
My lesson from this is for wives to get a credit card in their own name, a bank account in their own name, buy a car in their own name. Don't presume that just because you as a couple pay your debts regularly and have a sterling credit rating that this will be applied to you as an individual after a divorce, although the husband certainly keeps his rating. But, as I mentioned, any bad credit from the marriage will be applied to you.
It's quite probable, but no excuse for the mistake. I am named after my father and ended up with an MCI phone bill. Long story short my parents had told them to cancel the service, but the call center CSR who barely understood English didn't understand it and cancel it. They continued to bill for 2 more months of service at the same time that another long distance carrier was providing and billing for service - my parents refused to pay the bill. They had been arguing back and forth with MCI for 2 years or so over whatever amount it was (either $60 or $90).
Eventually when it changed hands between one debt collection agency and another, *I* ended up getting the bills at a separate address, and it started showing up on MY credit report. Each time I called the collector to let them know that this bill wasn't mine they basically brushed me off. Eventually my parents convinced MCI that the debt was unjustified in the first place at which point they purchased it back from the collector.
Still though, it's amazing what they screw up. I've gotten bills in the mail from debt collectors for overdraft charges on my Bank of America checking account. I've never had a BoA account. When I call to tell them this and confirm the SSN I find out that the last 4 digits of the SSN don't match mine - aren't even close. My only guess is that somebody with the same name couldn't be tracked down so they just matched the name in a database, found an address, and then blasted out a bill hoping I'd pay. Luckily THOSE haven't showed up on my report.
Overall though, the whole credit industry and reporting system is a shaky sham. In my personal experience who the collectors tag with a debt is sketchy at best. The report itself is very inaccurate yet more and more places are treating it as if it's some divinely approved analysis of one's character.
"People who think they know everything are very annoying to those of us who do."-Mark Twain
You'd think SSNs would help with that...yet last time I pulled my credit report I found THREE other socials listed on my report under my name. They actually have a field for "Alternate SSN" for some reason. So I had 3 guys with my same first and last name, but different socials somehow affecting my credit score.
If someone "borrows" your new car while you sleep and returns it all scratched and dented, it would be wrong to say "Well, you were sleeping so you didn't lose use of the car and when you woke up you were able to drive it so it wasn't really stolen." The car was stolen and now you'll need to take time (and spend money) fixing the damage done.
When your identity is stolen, the thieves steal your good credit rating and your time to fix the mess. I was lucky that the thieves tripped up before any real damage was done to my credit. Had the card gone to them, they would have maxed it out and stuck me with the bill. Collections agencies don't really care if you tell them someone else ran up the charges. They just want to be paid and will hound you until you pay up. (Side Note: The thieves actually tried getting a $5,000 cash advance before the card was activated. Capital One denied the request but didn't flag this as suspicious behavior.)
Also, ID Theft can lead to Criminal ID Theft. For example, this guy: http://g27radio.blogspot.com/2007/04/think-youre-safe.html Because someone stole his identity and gave the stolen identity to police, this guy's life has gone down the tubes. Criminal checks by employers uncover his (wrongfully assigned) criminal history. Police (unconvinced that he really isn't the guy who was arrested) hound him waiting for any slight trip-up. His life is a living hell and all because some guy said he was Joe Smith instead of Jim Jones.
So when a criminal takes some private information of yours and winds up trashing your credit rating, possibly ruining you financially and causing you to have to spend tons of time/money repairing the damage, I feel that "theft" is an appropriate term.
My sci-fi novel, Ghost Thief, is now available from Amazon.com.
How does one prove that one was denied a job because of a credit report? This question is not rhetorical.
A friend of mine, who has fallen on hard times, suffering the double whammy of unemployment coupled with massive debt, has been unable to find a job for almost three years. He often gets close -- getting past the phone screen, first and second interview, tour of the facilities, and then, at the point where one would expect either an offer or "we have decided to look elsewhere", he gets -- nothing. The prospective employer simply stops responding, as if he dropped off the face of the earth. We are pretty sure something is going on, and it's almost certainly the results of a credit check, (we know his credit is ghastly) but as the company will no longer communicate, he does not know how to proceed.
I'm a little conflicted. I'm fairly libertarian in my views, and believe a company has a right to hire whom they please, but in this case it leaves someone who has had a few setbacks absolutely nowhere to go. Except, perhaps, a life of government subsistence, or I dunno, a life of crime. He wants to work and pay back his debt, but (if this is true) his debt is what is preventing him from finding work -- a classic catch-22. Where does one go from here?
Oliver's law of assumed responsibility: If you're seen fixing it, you will be blamed for breaking it.
While this is an old story it's also still a problem.
About 6 months ago I read a similar story about business's using the credit reports as a guide to see if a prospective employee would steal or not. The idea being that the better your scores the less likely you are to embezzle, or steal from your employer.
I didn't think about it at the time and forgot about it.
Then my neighbor was turned down for a job based on her credit.
She lost her job a while back (over a year ago), and instead of getting a new job right away, took the severance package and enjoyed some time off from working. By the time she was ready to work again, jobs in her field were hard to come by. After being off for so long and no longer having the severance package to help pay bills, she started falling behind with her bills. Her mortgage company, seeing all the Fed money, refused to refinance the home since she doesn't have a job and started the foreclosure process. She finally found a possible job, and was told that pending a "background check" the job was hers.
By getting this job everything would be golden for her. She could pay her bills and then refinance the house. The problem was that she didn't get the job. The reason was due to the foreclosure on her house. That showed up on her credit report. So here's the rub. Can't stop foreclosure without a job, can't get a job due to the foreclosure.
Granted, it's her own fault for not getting another job so soon after being unemployed, but I've seen dozens of folks do the same thing. You get a large payout and take a vacation.
I wonder how many other people are caught up in the same sort of issue?
You want to work, but can't due to the credit report, but if you had the job, you could resolve the bad credit report.
- Goran
Carpe Scrotum - The only way to deal with your competition.