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UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D.C. 20580
April 17, 1998
Lee Seham, Esq.
Seham, Seham, Meltz & Petersen, LLP
380 Madison Avenue, Suite 17
New York, New York 10017-2513
- Re: Section 605 of the Fair Credit Reporting Act
Dear Mr. Seham:
This is in response to your letter of November 12, 1997, requesting
the staff's views on the situation where a consumer reporting
agency (CRA) verifies for a client the accuracy of graduation
information and dates of past employment that an applicant has
recorded on a recently submitted resume or employment application.
You ask whether the time limits on reporting adverse information
found in Section 605 of the Fair Credit Reporting Act (FCRA) apply
to the verification of graduation and past employment.
Section 605 of the FCRA prohibits CRAs from providing reports
that contain certain types of information that antedate the report
by seven years (ten years in the case of bankruptcies). Sections
605(a)(1) through (a)(5) specify particular items of information
subject to the reporting prohibitions, including bankruptcy matters,
suits and judgments, tax liens, accounts placed for collection
or charged to profit and loss, and criminal matters. Dates of
employment and educational histories are not covered by these
subsections.
Section 605(a)(6) is a more general provision that supplements
subsections (a)(1) through (a)(5). Section 605(a)(6) prohibits
the reporting of any "adverse item of information" that
antedates the report by more than seven years. The FCRA does not
define the term "adverse item of information." We believe
that the common understanding of these words must be used. The
dictionary definition of "adverse" includes "unfavorable"
or "opposed to one's interests." Accordingly, we believe
that to be covered by Section 605(a)(6) information must cast
the consumer in a negative or unfavorable light.
The fact that a job applicant attended college or was employed
at a particular job during certain years does not reflect adversely
upon the consumer. We conclude, therefore, that this information
is not "adverse" information as the term is used for
Section 605 purposes. Thus, when a job applicant records such
information on a resume or an employment application, a CRA may
verify and report the information without regard to the seven-year
reporting period set forth in Section 605.
It is, of course, possible that information collected by a CRA
about an applicant's education and job history may be incorrect,
and that any error may adversely affect the applicant. For example,
a CRA may incorrectly report that an applicant did not graduate
from college. As a result of this error, an employer may decide
not to hire the individual. We note that in this circumstance
the employer has to make a disclosure to the applicant before
denying employment (Section 604(b)). As part of this disclosure,
the employer must provide a copy of the report that is the basis
for the employer's tentative decision. The consumer will, therefore,
be able to see that the report is inaccurate and may then discuss
the error with the employer before the employer actually takes
the adverse action.
The views set forth above are staff views and do not reflect
the views of the Commission or any particular Commissioner.
Sincerely,
William Haynes
Attorney
Division of Credit Practices
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