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Beware of Illegal Credit Checks – Consumers Can Receive $10,000 In Penalties

By on July 29, 2019

Crosner Legal is a public interest law firm that focuses on helping employees, tenants, injured victims, and people who have been frauded to seek justice and get paid back.

The first issue I’d like to discuss is credit and background checks. 

It is very common that upon submitting an job application, employees are required to undergo a background check. For tenants, it is common that landlords require tenant screenings which check for credit and other character information such as whether you have filed a bankruptcy or ever been evicted in the past. Credit checks and character/criminal background checks are also common with a lot of purchases, such as leasing or financing a vehicle or even financing a dental procedure. 

What you may not know is that California and the federal government have very strict requirements before a company or landlord can undergo a background, criminal or credit check. These laws operate to protect individuals from unknowingly having their personal information revealed to others, which is a your right as a citizen. 

Under California law, if a company or landlord does not provide the proper disclosure forms to an individual prior to running a background, criminal or credit check, they must pay a penalty to the individual of $10,000. Federal law tacks on another $100 to $1,000 per violation. 

It’s been my experience that companies rarely provide these disclosures properly to individuals prior to running the checks. 

As evidence of my point, here are a few companies that have settled class actions due to not obtaining proper authority to run background and credit checks: Petco ($1.2 million); Delta ($2.3 million); CVS ($1.3 million) B of A ($1.8 million); Uber ($7.5 million); Frito-Lay ($2.4 million); among many others.

If you can recall any times over the past two years where you had your credit, criminal or background checked by a company or landlord, I urge you to contact our law firm by phone to see if you may have a claim. If you cannot speak right now because you’re at work or for any other reason, the next best thing is to submit to our online form with a brief description about your background or credit check and provide a time/date you’d like to speak.

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