Two casinos have agreed to pay $325,000 in civil penalties to settle Federal Trade Commission (FTC) charges that they denied consumers jobs based on their credit reports, without informing them of their rights under the Fair Credit Reporting Act (FCRA).
According to an FTC news release, the FTC’s complaint alleges that Las Vegas-based Imperial Palace, Inc. (d/b/a Imperial Palace Casino) and Biloxi-based Imperial Palace of Mississippi, Inc., ask job applicants to sign a release form authorizing the defendants to obtain the applicants’ credit reports, then review each credit report and use a “Background Form” to rate the applicant as either “poor,” “fair,” or “good.” Based on this rating, the applicant is then recommended as “favorable” or “unfavorable.” The FTC alleges that, in many cases, the defendants’ decision not to hire a particular applicant was based wholly or partly on information contained in his or her credit report – the FCRA defines this practice as “adverse action” against the applicant.
The FTC’s news release states that the FCRA requires that before taking adverse action against a current employee or job applicant based on information in the individual’s credit report, the employer must give that individual a copy of the report and a written description of his or her FCRA rights. After it takes adverse action, the employer must provide the consumer: (1) notice of the action taken; (2) the name, address, and phone number of the credit bureau from which the report was obtained; (3) a statement that the credit bureau did not make the decision to take the adverse action and cannot provide specific reasons why it was taken; (4) notice of the consumer’s right to obtain a free copy of his or her credit report within 60 days; and (5) notice of the consumer’s right to dispute the accuracy of the information in his or her credit report with a credit bureau. The FTC charges that the defendants failed to provide applicants with the required notices.
According to the FTC, the proposed consent decree bars the defendants from taking adverse action against current employees or job applicants based on information in their credit reports without providing the FCRA-required notices. The decree requires the defendants to pay a civil penalty of $325,000. The proposed decree also contains standard recordkeeping provisions to assist the FTC in monitoring the defendants’ compliance. The consent decree does not constitute an admission by the defendants of a legal violation of the FCRA.
Council's The A to Z of Employment Law is a 2-day event that will provide you with a comprehensive overview of all aspects of employment law, including recruitment, hiring, and compliance with the FCRA when conducting credit checks. For more information on this program, click on the link above.