Notice of adverse action

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Notice of adverse action: What is it?

If your business uses credit history and related information to evaluate candidates for employment or promotions, you need to disclose this. A notice of adverse action letter lets them know you’re checking their credit, and if you choose, gives them a chance to respond to what you discover. Pick "pre-action" if you haven’t yet checked, and "post-action" if you have and are inviting them to challenge your findings.

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So, what goes into a Notice of Adverse Action:

  • Who you're sending the letter to

    Have their name and contact info ready.

  • Why you're checking their credit

    Know the reason for the credit check, as well as the contact info of the credit reporting agency.

  • Information review

    Decide if you will give the recipient a chance to review and respond to the information about them.

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Sample notice of adverse action



Dear :

In connection with your application for employmentpromotion with (the "Company"), you authorized the Company to perform a background check on you, using either internal resources or an outside agency.

We are currently reviewing the investigative consumer and consumer credit reports we received and may decide to eliminate you from further consideration for employmentpromotion based, in whole or in part, on the information contained in the reports. Enclosed is a copy of the investigative consumer and consumer credit  reports, together with "A Summary of Your Rights Under the Fair Credit Reporting Act" as required by federal law.


The Company's policy is to give an applicantcurrent employee daysweeks  to review the information contained in the report before a final decision is made. If, within this time frame, you can prove that the information contained in the report is inaccurate or incomplete, please let us know and we will review the corrected information before making a final employment assessment. If we do not hear from you within this time, our tentative decision will become final and you will not be hired.your employment will be terminated.

This letter has been sent to you in compliance with the Fair Credit Reporting Act.

Sincerely,

_______________________________
Title: 





[PAGE BREAK HERE]

A Summary of Your Rights Under the Fair Credit Reporting Act

The federal Fair Credit Reporting Act (FCRA) promotes the accuracy, fairness, and privacy of information in the files of consumer reporting agencies. There are many types of consumer reporting agencies, including credit bureaus and specialty agencies (such as agencies that sell information about check writing histories, medical records, and rental history records). Here is a summary of your major rights under the FCRA. **For more information, including information about additional rights, go to ****www.ftc.gov/credit **or write to: Consumer Response Center, Room 130-A, Federal Trade Commission, 600 Pennsylvania Ave. N.W., Washington, D.C. 20580.

1. You must be told if information in your file has been used against you. Anyone who uses a credit report or another type of consumer report to deny your application for credit, insurance, or employment - or to take another adverse action against you - must tell you, and must give you the name, address, and phone number of the agency that provided the information.

2. You have the right to know what is in your file. You may request and obtain all the information about you in the files of a consumer reporting agency (your "file disclosure"). You will be required to provide proper identification, which may include your Social Security number. In many cases, the disclosure will be free. You are entitled to a free file disclosure if:

  • - a person has taken adverse action against you because of information in your credit report;
  • - you are the victim of identity theft and place a fraud alert in your file;
  • - your file contains inaccurate information as a result of fraud;
  • - you are on public assistance;
  • - you are unemployed but expect to apply for employment within 60 days.

In addition, by September 2005 all consumers will be entitled to one free disclosure every 12 months upon request from each nationwide credit bureau and from nationwide specialty consumer reporting agencies. See www.ftc.gov/credit for additional information.

3. You have the right to ask for a credit score. Credit scores are numerical summaries of your credit-worthiness based on information from credit bureaus. You may request a credit score from consumer reporting agencies that create scores or distribute scores used in residential real property loans, but you will have to pay for it. In some mortgage transactions, you will receive credit score information for free from the mortgage lender.

4. You have the right to dispute incomplete or inaccurate information. If you identify information in your file that is incomplete or inaccurate, and report it to the consumer reporting agency, the agency must investigate unless your dispute is frivolous. See www.ftc.gov/credit for an explanation of dispute procedures.

5. Consumer reporting agencies must correct or delete inaccurate, incomplete, or unverifiable information. Inaccurate, incomplete or unverifiable information must be removed or corrected, usually within 30 days. However, a consumer reporting agency may continue to report information it has verified as accurate.

6. Consumer reporting agencies may not report outdated negative information. In most cases, a consumer reporting agency may not report negative information that is more than seven years old, or bankruptcies that are more than ten years old.

7. Access to your file is limited. A consumer reporting agency may provide information about you only to people with a valid need - usually to consider an application with a creditor, insurer, employer, landlord, or other business. The FCRA specifies those with a valid need for access.

8. You must give your consent for reports to be provided to employers. A consumer reporting agency may not give out information about you to your employer, or a potential employer, without your written consent given to the employer. Written consent generally is not required in the trucking industry. For more information, go to www.ftc.gov/credit.

9. You may limit "prescreened" offers of credit and insurance you get based on information in your credit report. Unsolicited "prescreened" offers for credit and insurance must include a toll-free phone number you can call if you choose to remove your name and address from the lists these offers are based on. You may opt-out with the nationwide credit bureaus at 1-888-OPTOUT (1-888-567-8688).

10. You may seek damages from violators. If a consumer reporting agency, or, in some cases, a user of consumer reports or a furnisher of information to a consumer reporting agency violates the FCRA, you may be able to sue in state or federal court.

11. Identity theft victims and active duty military personnel have additional rights. For more information, visit www.ftc.gov/credit.

States may enforce the FCRA, and many states have their own consumer reporting laws. In some cases, you may have more rights under state law. For more information, contact your state or local consumer protection agency or your state Attorney General. Federal enforcers are:

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TYPE OF BUSINESS CONTACT
Consumer reporting agencies, creditors and other not listed below Federal Trade Commission:
Consumer Response Center - FCRA
Washington, DC 20580
1-877-382-4357
National banks, federal branches/agencies of foreign banks
(word "national" or initials "N.A." appear in or after bank's name)
Office of the Comptroller of the Currency
Compliance Management 
Mail Stop 6-6 Washington, DC 20219
800-613-6743
Federal Reserve System member banks
(except national banks, and federal branches/agencies of foreign banks)
Federal Reserve Consumer Help (FRCH)
P O Box 1200
Minneapolis, MN 55480
Telephone: 888-851-1920
Website Address:
www.federalreserveconsumerhelp.gov
Email Address:
ConsumerHelp@FederalReserve.gov
Savings associations and federally chartered savings banks
(word "Federal" or initials "F.S.B." appear in federal institution's name)
Office of Thrift Supervision Consumer Complaints
Washington, DC 20552
800-842-6929
Federal credit unions
(words "Federal Credit Union" appear in institution's name)
National Credit Union Administration
1775 Duke Street 
Alexandria, VA 22314
703-519-4600
State-chartered banks that are not members of the Federal Reserve
System
Federal Deposit Insurance Corporation
Consumer Response Center
2345 Grand Avenue, Suite 100
Kansas City, Missouri 64108-2638
1-877-275-3342
Air, surface, or rail common carriers regulated by former Civil Aeronautics
Board or Interstate Commerce Commission
Department of Transportation
Office of Financial Management
Washington, DC 20590
202-366-1306
Activities subject to the Packers and Stockyards Act, 1921 Department of Agriculture
Office of Deputy Administrator - GIPSA
Washington, DC 20250
202-720-7051