About the Consumer Credit Reporting Reform Act of 1997

The Consumer Credit Reporting Reform Act, or CCRRA, of 1997 changed the way employers were able to gain access to credit reports dealing with the hiring process, promotions, and retention. How the law affects consumers depends on whether employers are requesting credit reports for consumer reporting or for investigative reporting.

Consumer Reports

Knowing your rights will help protect you and your credit.

A consumer report covers the individual's credit history, giving future employers a look into creditworthiness, character, and even lifestyle. However, before an employer can pull the report of an applicant or employee, he must inform the individual in writing that considerations are being made based on his credit score. The consent must also be in writing, and a signature usually "seals the deal."

That is the beginning of the process. With the reform, no adverse actions can be made by the employer until the employee (or future employee) receives a copy of the report and is notified of his right to contest information found on it.

Investigative Consumer Reports

Knowing the "heads up" of your consumer report can smooth the process.

An investigative consumer report is almost the same as a consumer report, except that the information is mostly found and confirmed through those who best know the person (family, friends, and neighbors). The same prerequisites apply. However, with the Consumer Credit Reporting Reform Act, the employer must inform the employee or applicant of the usage of an investigative consumer report. This gives the employee/applicant a chance to request the nature and extent of the report.

Penalties

Consumers have more rights under the reform act.

According to the Consumer Credit Reporting Reform Act of 1997, penalties are issued if an employer fails to comply with the act. Failure to comply can result in punitive damages, attorney's fees, and actual damage costs to be awarded to the employee or applicant if he can prove negligent non-compliance or willful non-compliance.

Protecting Consumers

Not only does the CCRRA affect employers, employees and job applicants, it makes clearing credit reports easier for everyday consumers. When consumers apply for credit and are declined, they have the right to a free credit report, which they can evaluate it to find any discrepancies. Those mistakes can be removed and any multiple entries can be deleted as well.

Changes in the Fair Credit Reporting Act

Guaranteed approvals and pre-approvals from banks must now take heed.

The initiation of the Consumer Credit Reporting Act of 1997 also called for amendments in the Fair Credit Reporting Act. It was amended in 2003 to make credit regulations stronger and avoid what might just be legislation loopholes. Marketing offers were given stronger regulations to their so-called pre-approvals and were made to uphold these offers when taken advantage of by consumers.