Credit Reports

Legislative Alert – Maryland HB175 Seeks to Limit Use of Credit Reports by Employers

February 3, 2010 By Chris Miller

We just received this alert from The National Association of Professional Background Screeners (NAPBS).

Maryland HB175 Seeks to Limit Use of Credit Reports by Employers

Maryland House Bill 175 would prohibit an employer from using an applicant’s or employee’s credit report or credit history in determining whether to deny employment to the applicant, discharge the employee or determine compensation or terms, conditions, or privileges employment; authorizing an employer to request or consider an applicant’s credit report or credit history under specified circumstances; authorizing an applicant or employee to bring an action for injunctive relief, damages, or other relief for a violation of a specified provision of law; etc.

We urge you to participate in this action alert to communicate the impact this will have on employers in Maryland and on companies providing background screening services both in Maryland and nationally.

Here is the letter that we’ve sent:

Dereck Davis, Chairman, House Economic Matters Committee

Re: MD House Bill 175

I am writing in opposition to House Bill 175 – Credit Reports and Credit Histories of Applicants and Employees. This bill, if enacted, would effectively prohibit employers from utilizing credit history in hiring prospective employees.

We are a member of the National Association of Professional Background Screeners (NAPBS) which represents over 700 members and their respective companies. Our company is a national provider of background check and credential verification information for employers. Our clients are representative of the more than 88% of companies in the US who perform background checks on their employees across the country. Our information products protect employers from liability and ensure that newly hired employees pose no financial risk.

Credit reports are integral to the hiring process because employers must determine the accuracy and completeness of a job application. Credit reports are used for employment checks to show former addresses, former employment, and the financial situation of a prospective employee. By using credit reports in the hiring process, employers avoid wasting resources on recruiting, hiring, and training new employees, only to find out later that the hiring decision was based on incomplete or falsified information. Also, employers use credit reports to safeguard against internal theft that can be a result of employees who can not meet their monthly financial obligations.

The use of credit reports for employment decisions is governed and expressly allowed by the federal Fair Credit Reporting Act (FCRA). Under the FCRA, an employer must give the consumer notice that a credit report may be used in the hiring process and require the consumer’s written consent to access their credit report. The FCRA provides important consumer protections by requiring a notice by the employer if an adverse action is taken; i.e. the applicant is not hired. The notice includes the name, address, and phone number of the consumer reporting agency or credit reporting agency that supplied the report. Additionally, under existing federal law, potential employees already receive certain protections relating to employer consideration of prior bankruptcy filings.

It is our hope that Maryland employers will be allowed the continued use of credit reports for hiring decisions. If you have any questions concerning how credit reports are used by employers to make decisions, please feel free to contact me. Thank you for your time and consideration of our views.

Sincerely,

Chris Miller

President

FYI Screening, Inc.

Employee Screening Articles For April 2009

May 4, 2009 By Chris Miller

In case you missed any of our employee screening articles for April, here’s a quick recap of our most popular:

Smart, Compliant Hiring Decisions Made Easy

FYI Screening, Inc. offers a complete portfolio of employee screening services that will help you work smarter while providing the industry’s fastest turnaround and the highest quality results.

This will allow your company to focus on what really matters:

Hiring and Retaining The Best Employees Possible

Subscribe to our blog to stay current on all employee screening issues.

Enforcement Of The New “Red Flags Rule” Delayed Again

April 30, 2009 By Chris Miller

red-flags1

The Federal Trade Commission will delay enforcement of the new “Red Flags Rule” until August 1, 2009, to give creditors and financial institutions more time to develop and implement written identity theft prevention programs. For entities that have a low risk of identity theft, such as businesses that know their customers personally, the Commission will soon release a template to help them comply with the law. Today’s announcement does not affect other federal agencies’ enforcement of the original November 1, 2008 compliance deadline for institutions subject to their oversight.

“Given the ongoing debate about whether Congress wrote this provision too broadly, delaying enforcement of the Red Flags Rule will allow industries and associations to share guidance with their members, provide low-risk entities an opportunity to use the template in developing their programs, and give Congress time to consider the issue further,” FTC Chairman Jon Leibowitz said.

Are You Complying With The Red Flags Rule?

The Red Flags Rule requires many businesses and organizations to implement a written Identity Theft Prevention Program designed to detect the warning signs – or “red flags” – of identity theft in their day-to-day operations. Are you covered by the Red Flags Rule?

Download “Fighting Fraud with the Red Flags Rule: A How-To Guide for Business” here.

Find out if the rule applies to your business or organization

Get practical tips on spotting the red flags of identity theft, taking steps to prevent the crime, and mitigating the damage it inflicts

Learn how to put in place your written Identity Theft Prevention Program

By identifying red flags in advance, you’ll be better equipped to spot suspicious patterns when they arise and take steps to prevent a red flag from escalating into a costly episode of identity theft. Take advantage of other resources on this site to educate your employees and colleagues about complying with the Red Flags Rule.

Subscribe to our blog to stay current and learn more about the “Red Flags Rule.”

Photo Credit: rvw

Employee Screening Articles For October

October 31, 2008 By Chris Miller

In case you missed any of our employee screening articles for October, here’s a quick recap:

Sex Offenders and Halloween Safety Tips- Part 2

Sex Offenders and Halloween Safety Tips

Pre-Employment Drug Testing For Teachers

Background Checks For The Education Industry

Background Checks For Temporary Employees

Do You Have a Sex Offender Working For You?

Immigration Crackdown – HR Director Indicted

Drug-Free Work Week

Why Gaps In Employment Are A Red Flag

$100 Million For E-Verify

Hiring For Hotels: Why Screening Is Essential

Subscribe to our blog so you don’t miss any helpful tips and articles like these.

4 Questions Employers Have About Employee Screening

September 11, 2008 By Chris Miller

4 Questions Employers Have About Employee Screening Even though employee screening should be a fundamental part of every company’s hiring practices, many employers are concerned about how to take action on it. Most of them understand the severe costs of hiring a bad employee. But, they are still uncertain about how to begin screening candidates and conducting background checks.

Here are 4 common questions that many employers have about employee screening…

#1 – “Can We Afford Screening?”

The question that employers should be asking is, “Can we afford not to conduct employee screening?” Hiring a person without knowing whether he has a criminal record, drug problem, or a history of violence can be far more expensive than doing a background check. A single violent outburst in the workplace can end up costing millions. Meanwhile, screening a job candidate by running a thorough background check usually costs less than what employers spend on that employee during the first day.

#2 – “Do I Have A Legal Right To Screen?”

The government allows employers to conduct intense screening and background checks to order to avoid hiring bad candidates. Once a potential hire signs a consent form, the employer can legally begin checking credit reports, motor vehicle records and civil reports. They can also perform a criminal history search while verifying the candidate’s employment and education history.

#3 – “How Much Time Does Take?”

One of the concerns that employers have is whether doing an exhaustive background check will take too much time. A thorough screening process shouldn’t require more than a few days. Plus, having a policy of doing employee screening tends to discourage bad candidates from applying.

#4 – “Do I Have The Resources?”

Screening job candidates properly does require time and attention. Because many hiring managers are increasingly busy, a lot of companies choose to outsource the job to an experienced employee screening company. This type of service can immediately start conducting extensive background checks on potential hires.

Employers should consider employee screening as a critical part of the hiring process. It’s legal, cost-effective, can be done quickly and by outsourcing, doesn’t require a boost in HR staff. And the nightmare it can help employers avoid from taking on bad hires is immeasurable.