Do you feel Amazon discriminated against because of your credit history? Did the company improperly use your credit history information? Do you believe you were turned down for a job or a promotion as a result?

If so, here are some things you need to know. 

How often are credit checks used in making employment decisions?

CNBC reported that

A CareerBuilder survey found that 72 percent of employers conduct background checks on all the employees they hire and, of those cases, 29 percent check credit reports. Typically employers perform the checks on people who will be handling financial transactions and responsible for large amounts of money…

USA Today noted that

Patterns of money mismanagement — like a bunch of missed payments or multiple collection accounts — could wind up hurting your odds of scoring a position, particularly if that gig involves handling cash, access to sensitive financial information, company accounting or government work.

Is it illegal to use credit checks in hiring and other employment decisions?

The federal Fair Credit Reporting Act (FCRA) does permit employers to request credit reports on existing employees for decisions on promotions or firing.

As Demos reports, although employers don’t (or shouldn’t) have access to three-digit credit scores, they can get reports with information on:

• mortgage debt
• student loans
• car payments
• details on credit card accounts including balances, credit limits, and monthly payments
• bankruptcy
• bills, including medical debts, that are in collection
• tax liens

Under the FCRA, employers are supposed to first get written permission from the employees they want credit history information on. Employers are also required to notify employees before they take “adverse action” (such as failing to hire, promote, or retain an employee) based on their credit history.

Employers must offer a copy of the credit report and a summary of the employee’s consumer rights to an employee who is negatively affected by the use of credit information, and the employee must have at least a few days to review the information and dispute any errors.

State laws on using credit checks in employment

A number of cities and states have laws limiting the use of credit checks in decisions about hiring, firing, and promotions.

These laws are based on concerns that:

• Credit history is not relevant to someone’s ability to do a job.

• Using credit histories in employment decisions can have an outsize impact on disadvantaged communities and exacerbate discrimination on the basis of race.

• Looking at an applicant’s or employee’s credit history is an invasion of privacy since it can reveal information about, or lead to intrusive questions about, medical problems or spousal abuse.

• Banning credit checks increases overall employment in geographic areas where many people have poor credit.

As Demos notes,

Credit checks bar qualified workers from jobs because poor credit is associated with unemployment, medical debt and lack of health coverage, which tell very little about personal job performance, but rather reveal systemic injustice, individual bad luck, and the impact of a weak economy. The financial crisis and the Great Recession caused millions of Americans to be laid off from their jobs, see their home values plummet to less than their mortgage debt, and find their savings and retirement accounts decimated – all of which can affect credit history.

Credit history-based discrimination is quite common. A 2013 report by Demos found that one in 10 unemployed workers in a low or middle-income household with credit card debt were denied a job because of a credit check.

Also, according to Demos,

Because of the legacy of predatory lending and racial discrimination, people of color tend to have lower credit ratings than whites, and so may be disproportionately likely to be denied a job because of a credit check. A persistent legacy of discriminatory lending, hiring, and housing policies has left people of color with worse credit, on average, than white households.

Also, people may be denied employment opportunities because of false information in their credit reports. As Demos notes,

A Demos study of low- and middle-income households carrying credit card debt finds that 1 in 8 respondents who have poor credit cite “errors in my credit report” for their credit problems. A Federal Trade Commission (FTC) study finds that five percent of consumers, amounting to 45 million Americans, had errors on at least one of their three major credit reports.

Where is it illegal to use employment credit checks?

As of this writing, an employer’s right to use credit checks is limited in:

• California
• Colorado
• Connecticut
• Delaware
• Hawaii
• Illinois
• Maryland
• Nevada
• Oregon
• Vermont
• Washington
• New York City
• Chicago

Amazon has operations in several of these locations.

More than 20 other states are considering similar laws, and bills prohibiting the use of credit reports in employment decisions have been introduced in Congress.

Credit History Discrimination at Amazon

As activescreening reported, two people claimed they were unfairly eliminated as applicants for jobs with Amazon after erroneous background checks:

The online mega-retailer now finds itself the subject of two separate class action lawsuits, both stemming from allegations it violated the Fair Credit Reporting Act. The first case, filed in Tampa, Florida, is the result of Amazon’s behavior following a job fair. The applicant claims he filled out an application at a job fair, visited amazon.com a month later, and then found out he didn’t get the job because of information contained in a background check.

The plaintiff/applicant makes several claims:

1. Amazon checked the applicant’s credit report without his permission
2. Amazon didn’t disclose the results to the applicant and let him explain the information
3. Amazon didn’t hire the applicant based on the results

As Courthouse News Service reported about the case:

Plaintiff was given no pre-adverse notice whatsoever of the information contained in the consumer report upon which defendant based its decision. Defendant did not provide plaintiff with a copy of the consumer report that it relied upon prior to defendant’s adverse employment action. As a result, in violation of the FCRA, plaintiff was deprived of any opportunity to review the information in the report and discuss it with defendant before he was denied employment.

In another case, as activescreening described,

An applicant claims he was initially offered a job at Amazon, only to have it withdrawn after faulty information was reported in a background check. The lawsuit says that Amazon violated FCRA by not giving him a copy of his background report and allowing him to correct the erroneous information.

Your next steps as the victim of credit history discrimination at Amazon

If feel you’ve feel you may have been the victim of credit history discrimination at Amazon, call attorney Cj Rosenbaum at 212-256-1109, text 212-256-8492, or email CJ@AmazonSellersLawyer.com. You can also submit a summary of your situation online .