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Wednesday, August 12, 2009

FTC nails two companies for FCRA violations

The FTC has settled complaints filed against Quality Terminal Services, LLC and Rail Terminal Services, LLC for allegedly violating the Fair Credit Reporting Act by secretly using consumer reports as the basis for firing employees and rejecting job applicants but not informing the spurned workers and applicants of their rights granted by the FCRA. Here's more about this from 7thSpace.com.

"Two companies that fired workers and rejected job applicants based on background checks without informing them of their rights under the Fair Credit Reporting Act (FCRA) have agreed to settle Federal Trade Commission charges that they violated federal law. The settlements require the defendants to pay $77,000 in civil penalties and bar future FCRA violations.

Employers often conduct background checks and seek employees’ and job applicants’ credit records, criminal histories, and other background information from a consumer reporting agency (CRA) such as a credit bureau or background screening company. The FCRA requires that before taking adverse employment actions based on these consumer reports – for example, firing employees or denying job applications – employers must provide the employees or applicants with a copy of the report, identify the CRA that provided it, notify them that the CRA did not make the adverse action decision, and inform them that they have the right to obtain a free copy of the report from the CRA and dispute its accuracy. According to the FTC’s two complaints, both defendants contracted with a CRA to conduct background checks including criminal record reviews for employees and job applicants, and made hiring and firing decisions based on those background checks. The companies allegedly failed to provide the employees and applicants with pre-adverse action notices and adverse action notices as required by the FCRA.

The settlements require Quality Terminal Services, LLC and Rail Terminal Services, LLC to pay $53,000 and $24,000 in civil penalties, respectively, and to provide the FCRA-required notices in the future. The settlements also contain record-keeping and reporting provisions to allow the FTC to monitor compliance. The Center for Democracy and Technology (CDT) filed a petition with the Commission complaining of adverse action notice violations by the defendants. The FTC acknowledges CDT’s invaluable contribution in bringing these matters to the agency’s attention.

The Commission vote to refer the complaints and stipulated final orders to the Department of Justice for filing was 4-0. The action against Rail Terminal Services was filed in the U.S. District Court for the Western District of Washington; the action against Quality Terminal Services was filed in the U.S. District Court for the District of Colorado."

The whole article is here - http://7thspace.com/headlines/316906/two_companies_pay_civil_penalties_to_settle_ftc_charges_failed_to_give_required_notices_to_fired_workers_and_rejected_job_applicants.html

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