I'd like to comment on your March 15 article regarding the use of credit reports for employment ("Bad credit is blocking people getting jobs"). As outlined in your article, consumers have certain protections under federal law when their credit report is used for employment. Foremost among these is the fact that they have to give signed permission before a credit report can even be accessed.
Credit reports have a proven track record of predicting risk. The ability to assess risk is critical to many business owners, as highlighted by the misfortune suffered by Marie Payzant, a business owner who had caught former workers stealing from her.
That's one reason why the use of credit reports for employment purposes is a valuable resource. According to the Association of Certified Fraud Examiners, employee fraud accounts for almost $1 trillion in business losses a year. The median loss suffered by organizations with fewer than 100 employees was $200,000, higher than the median loss in even the largest organizations. They also found that the key indicators of potential fraud were employees living beyond their financial means and employees experiencing financial difficulties. Since businesses with fewer than 100 employees make up 98 percent of all firms in the U.S. according to the Census Bureau, the potential impact of employee fraud is significant.
Employers should have information available to them that protects their businesses from catastrophic losses and also ensures that their workers can stay employed.
Stuart K. Pratt, Washington
The writer is president and CEO of the Consumer Data Industry Association.