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Ask the expert: Credit checks


Ask the expertIs an employer allowed to carry out credit checks on staff and, if so, is their consent required? Esther Smith and Martin Brewer advise.

The question:

We have been asked by a client governed by the FSA to confirm that we have carried out police and credit checks on our employees who will work at the client’s site. Although the police check is covered by CRB checks, are we allowed to carry out credit checks on employees, and if so, do we need their authority?

Legal advice:

Esther Smith, partner, Thomas Eggar

We ought not to be carrying out credit checks on employees without their consent or implied consent. If someone has their credit rating checked too many times or too frequently it can adversely affect their own rating, which is why some people object.

I would ask the client to confirm in writing that it is a requirement of theirs that any individuals working on their account have been credit checked, and once you have this confirmation, you need to inform all the employees who are likely to work for this client of the requirement and your need to comply with it. You should tell all employees that you are proposing to credit check them against the home address details currently held on file by personnel, and to update you should those details have changed at all.

I do not think that I would expressly ask the employees to sign something consenting, although you can of course do this if you want to be ‘belt and braces’, but if the employees do not come back and object I would then proceed to carry out the checks and rely on the fact that they have implied that they consent to the checks by not complaining.

Esther Smith is a partner in Thomas Eggar’s Employment Law Unit. For further information, please visit Thomas Eggar.

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Martin Brewer, partner, Mills & Reeve

The short answer is that employers can do credit checks on prospective employees providing they obtain their signed consent.

Martin Brewer can be contacted at [email protected] . For further information, please visit Mills & Reeve.

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