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