Monday, April 26, 2010

A One Way Dead End Street: Employment Credit Checks

According to the American Bankruptcy Institute (ABI), more than 60,000 businesses in America filed bankruptcy in 2009 – long before the full economic collapse. In 2010 it’s no stretch whatsoever to project 100,000+ business bankruptcy filings. The past, with examples such as WorldCom and Enron, tells us that it’s not just the SMEs (Small to Medium Enterprise) that crash and burn, but the mega corporations as well. Using a very conservative figure of 50 employees per company, the 2009 figures tell us that more than 3 million people at these companies have already been tossed out into the street or are living in fear of a pink slip.

If a company is privately held, virtually no one within the company except the CFO has a clue about the company’s financial stability. Even in the case of a publicly held company such as Enron and many more just like them, the books are cooked and crooked so an annual report tells you nothing! Independent auditing firms are bought off every day and accounting scandals are rampant. The competition is fierce today to see who is less trustworthy . . . accountants or attorneys? It’s an absolute fact that the vast majority of mega corporations pay their invoices 30 to 59 days late simply because they are big enough to get away with it. It’s just the standard practice and everyone in the AP department throughout corporate America will verify the fact. Try paying your electricity bill 59 days late . . . in the dark.

With all this financial instability, complete lack of transparency and poor credit in the business world – what access or ability to evaluate and scrutinize do employees or prospective employees of a company have? ZERO! Enron sure looked stable to all those eager people lined up for a job. How many people left a good job to go to work for Enron to not only lose their job but have their entire retirement savings wiped out as well? May God rest Enron CEO, Kenneth Lay's good soul as thousands of his former employees work for pennies until death instead of the retirement they earned working for their CEO.


Just a brief look at the pantheon of American CEOs and we find such shinning examples as Bernard Madoff - Madoff Investment Securities, Kenneth Lay - Enron, Bernard Ebbers - WorldCom, Dennis Kozlowski – Tyco, Walter Forbes - Cendant Corporation and last but not least Mr. Wall Street himself Richard Fuld, Jr. - Lehman Brothers. Let’s not forget all those great individuals out there running those SME businesses who are sucking money out the bottom as fast as possible to live beyond their means or afford Viagra and keep that trophy bride by the pool at home. When you consider all these shining examples looking out for the financial welfare of all their employees “first and foremost” . . . it gets a little spooky when looking for a job or staying where you are. Just pure greed and or a sexual kink at the top of your company and you’re out of a job and never saw it coming.

Here is the ultimate question for every working American: how is it that we're given ZERO transparency or ability to review a company’s financial stability or credit rating, but every single company in America has the right to use YOUR PERSONAL credit report to fire you or not hire you? Even more insane: how is it that any of those 60,000 companies that filed bankruptcy in 2009 still barely floating can fire you on the spot for no other reason other than a poor personal credit report?

Believe it or not, it’s true in 47 states and 50+ percent of all jobs and 80+ percent of all white collar jobs now require a personal credit report. No report = no job and no job = bad credit. As if that’s not hard enough to believe, even more brain bursting and unbelievable is the fact that the percentage is increasing wildly as our economy gets worse by the day. Easily more than 100 million Americans have “bad credit” and have now lost the right to work in America. Why?

The answer is simple: the big three credit bureaus are making a buck off selling your credit report to employers and then using the proceeds to bribe members of Congress via hundreds of thousands in PAC money to kill HR3149. Similar legislation is already law in three states, but HR3149: The Equal Employment for All Act, that would make selling your credit report to employers illegal, has sat stalled in the House Committee on Financial Services for almost a year now. More than 38 percent of the committee members have the PAC marked bills in their wallets and “we the people” wonder why the legislation is stalled . . . could be the same human motivation that brought about our economic collapse and the Enron failure?

Zero statistical evidence whatsoever exists to prove in any way shape or form that an employee’s poor personal credit leads to fraud or theft within a company. You heard correctly . . . ZERO, NONE! To prove it we have the American CEOs noted above who had perfect credit. Even better than that, however, we have sworn testimony during the Oregon hearings on state legislation by a senior executive at Trans Union (one of the big three credit bureaus) that states that no correlation whatsoever exists. Selling the personal credit reports of Americans to employers was dreamed up as a revenue stream by the credit bureaus back in the 1990s and now it’s literally killing many of the 25+ million unemployed or under-employed Americans one day at time. It’s all the result and only the result of a clever multi-million dollar marketing scheme that convinced employers it was a good idea to run credit checks on their employees. It only costs eight bucks, why not? Even though we all thought slavery was abolished during the civil war . . . once an employer knows someone's debt load and credit standing - they know how low they can go on wages and how strong their chains and shackles are. It has nothing to do with theft and fraud risk whatsoever! A few pennies go missing from time to time from the bottom of the food chain but the billions get stolen at the top.


At the end of the day HR3149 is about the right to privacy and if you're not borrowing money or asking for credit your personal credit report has zero significance at all! Even if some day a link were to somehow be established between a bad credit report and fraud, the report is still a private document that belongs to each citizen not the employer. Most people would agree that regular church attendance by people = less theft and fraud in the workplace by the people that attend. Does that mean that employers should be allowed to ask you about your religion, church attendance or follow you around to see if you attend?

Instead of the liberty, freedom and the right to privacy our nation was founded upon, we have regressed backward to the good old debtors’ prisons of pre-colonial times. Remember? Being put in prison for owing money with no way to pay off the debt (a.k.a. improve your credit rating). Let’s see if we have this accurate . . . many of our ancestors left Europe and sailed to the New World to flee debtor’s prisons and taxation without representation. Now, even though 90 percent of the people support HR3149 – we have a modern day debtor’s prison called employment credit reports and our “representation” got bought out by Trans Union, Equifax and Experian? The cliché that “history repeats itself” sure rings true . . .

6 comments:

  1. I totally support passage of this bill.
    This is needed in today's economy.

    ReplyDelete
  2. I completely support this bill. I think there is some revelance in the fact labor laws have gotten so weak for the working people. I have worked for a major Global with more than 10,000 employees, for years. In the last 7 years: we have lost bonuses,personal days, lost our company cars, had to purchase nice cars to use, while not been reimbursed fairly until tax time by uncle sam, got way less value for our health care insurance. But the worst has been no raises for years. Everything has gone up in price over this time. And there is no way to improve the credit score. Individuals situations have gotten so tight, they are making very difficult decisions to provide the basics of life, examples being: doing without health insurance hoping they will not get ill, either not saving for retirement, or cashing out savings from401k IRA. Check cashing stores, pay day lenders, buy here pay here establishments are making a killing off working people living paycheck to paycheck. These hard working people are being shut out of banks, decent credit opportunies. Their credit scores are in the dumpster. They are very close to dumpster diving for dinner themselves. But these corporations are making more and more money every year. And companies have bought lobbist who have bought our respresntatives.

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  3. Let's get the ball rolling on supporting HR 3149. Consumer Investigative Reports are blatantly discriminatory!

    ReplyDelete
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    ReplyDelete
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