Aldi, Inc

Text (OCR of the scan at left; may contain errors)

IN THE MATTER OF ALDI, INe.

CONSENT ORDER, ETe. , TN REGARD TO ALLEGED VIOLATION OF THE FAIR CREDIT REPORTING ACT AND SEe. 5 OF THE FEDERAL TRADE COMMTSSION ACT Docket 3764. Complaint, Sept. 1997--Decision, Sept, 1997 This consent order requires, among other things, the Ilinois-based grocery chain to comply with the provisions of the Fair Credit Reporting Act requiring the consumers to be notified when they are denied credit, insurance or a job based in whole or in part on information in their credit report and requiring the denying company to provide the name and address of the consumer reporting agency that supplied the report.

Appearances For the Commission: John Hallerud and C Steven Baker. For the respondent: Keith Reed, Seyfarth, Shaw, Fairwether & Geraldson Chicago, IL.

COMPLAINT Pursuant to the provisions of the Fair Credit Reporting Act, 15 e. 1681 et seq. and the Federal Trade Commission Act, 15 e. 41 et seq. and by virtue of the authority vested in it by said Acts, the Federal Trade Commission, having reason to believe that Aldi, Inc. , a corporation, hereinafter referred to as respondent, has violated the provisions of said Acts, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint, stating its charges in that respect as follows:

DEFINITONS For the purposes of this complaint, the following definitions are applicable. The tenns consumer consumer report and consumer reporting agency shall be defined as provided in Sections 603(c), 603(d), and 603(f), respectively, ofthe Fair Credit Reporting Act, 15 e. 168Ia(c), 168Ja(d) and 168Ia(f).

PARAGRAPH 1. Respondent Aldi, Inc. is a corporation organized, existing and doing business under and by virtue of the Dccision and Order 124 F. laws of the State of Ilinois, with its offce and principal place of business located at 1200 N, Kirk Road, Batavia, Ilinois. PAR 2. Respondent, in the ordinary course and conduct of its business, has used infonnation in consumer reports obtained from consumer reporting agencies in the consideration, acceptance, and denial of applicants for employment with respondent. PAR 3. The acts and practices of respondent alleged in this complaint have been in or affecting commerce, as "commerce " is defined in the Federal Trade Commission Act. PAR. 4. Respondent, in the ordinary course and conduct of its business, has denied applications or rescinded offers for employment with respondent based in whole or in part on infonnation supplied by a consumer reporting agency, but has failed to advise consumers that the infonnation so supplied contributed to the adverse action taken on their applications or offers for employment, and has failed to advise consumers ofthe name and address ofthe consumer reporting agency that supplied the infonnation.

PAR. 5. By and through the practices described in paragraph four respondent has violated the provisions of Section 615(a) of the Fair Credit Reporting Act, IS U. e. 168Im(a).

PAR. 6. By its aforesaid failure to comply with Section 615(a) of the Fair Credit Reporting Act and pursuant to Section 621(a) thereof respondent has engaged in unfair and deceptive acts or practices in or affecting commerce in violation of Section 5(a)(I) of the Federal Trade Commission Act.

DECISION AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondent named in the caption hereof, and the respondent having been furnished thereafter with a copy of a draft of complaint which the Chicago Regional Office proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondent with violations of Section 615(a) of the Fair Credit Reporting Act and Section 5(a) of the Federal Trade Commission Act; and The respondent, its attorneys, and counsel for the Commission having thereafter executed an agreement containing a consent order an admission by the respondent of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signng of said agreement is for settlement purposes only and does not constitute an ALDI, IN e. 209 207 Dccision and Order admission by the respondent that the law has been violated as alleged in such complaint, and waivers and other provisions as required by the Commission s Rules; and The Commission having thereafter considered the matter and having detennined that it had reason to believe that the respondent has violated the said Act, and that complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of sixty (60) days, and having duly considered the comments filed thereafter by interested persons pursuant to Section 34 of its Rules, now in further confonnity with the procedure prescribed in Section 2.34 of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings and enters the following order:

1. Respondent Aldi, Inc. is a corporation organized, existing and doing business under and by virtue ofthe laws of the State ofIllinois with its offce and principal place of business located at 1200 N. Kirk Road, Batavia, Ilinois.

2. The acts and practices of the respondent alleged in this complaint have been in or affccting commerce, as "commerce " is defined in the Federal Trade Commission Act. 3. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent, and the proceeding is in the public interest.

ORDER For the purpose of this order, the tenns " consumer consumer report " and "consumer reporting agency" shall be defined as provided in Sections 603(c), 603(d), and 603(f), respectively, of the Fair Credit Reporting Act, 15 U.S. e. 1681a(c), 1681a(d), and 1681 a(f).

It is ordered That respondent Aldi, Inc. , a corporation, its successors and assigns, and its offcers, agents, representatives, and employees, directly or through any corporation, subsidiary, division or other device, in connection with any application for employment do forthwith cease and desist from:

210 FEDERAL TRADE COMMISSION DECISJOKS Decision and Order 124 F.T.C. 1. Failing, whenever employment is denied either wholly or parly because of infonnation contained in a consumer report from a consumer reporting agency, to disclose to the applicant for employment at the time such adverse action is communicated to the applicant (a) that the adverse action was based wholly or partly on infonnation contained in such a report and (b) the name and address of the consumer reporting agency making the report. Respondent shall not be held liable for a violation of Section 615(a) of the Fair Credit Reporting Act if it shows by a preponderance of the evidence that at the time of the alleged violation it maintaincd reasonable procedures to assure compliance with Section 615(a) of the Fair Credit Reporting Act.

2. Failing, within ninety (90) days after the date of service of this order, to mail two (2) copies of the letter attached hereto as Appendix , completed to provide the name and address of the consumer reporting agency supplying the report to each applicant who was denied employment by Aldi, Inc. between January 1 1994, and the date this order is issued, based in whole or in part on infonnation contained in a consumer report ftom a consumer reporting agency, such copies of the letter to be sent first class mail to the last known address of the applicant that is reflected in respondent's files, and accompanied by a copy of the Federal Trade Commission brochure attached hereto as Appendix B , copies of which are to be provided by respondent. Copies of the letters attached as Appcndix A need not be sent to any applicant who is denied employment with respondent during the time period specified above if the applicant' s application fie clearly shows that respondent Aldi Inc. has previously given the applicant notification that complies in all respects with the provisions of paragraph 1.(1) of this order.

II.

It is further ordered That respondent and its successors and assigns shall, for fivc (5) years from the date of issuance ofthis ordcr maintain and upon request make available to the Federal Trade Commission for inspection and copying, documents demonstrating compliance with the requirements of Part I of this order, such documents to include, but not be limited to, all employment evaluation criteria relating to consumer reports, instructions given to employees regarding compliance with tbe provisions of this order, all notices or a written or electronically stored notation ofthe description ALDI, INe. 211 207 Dccision and Order of the fonn of notice and date such notice was provided to applicants pursuant to any provisions of this order, and records of all applicants for whom consumer reports were obtained for whom offers of employment are not made or have been withheld, withdrawn, or rescinded based, in whole or in part, on infonnation contained in a consumer report.

It is further ordered That respondent and its successors and assigns shall, for five (5) years from the date of issuance ofthis order deliver a copy of this order at least once per year to all persons responsible for the respondent's compliance with Section 615(a) of the Fair Credit Reporting Act.

IV.

It is further ordered That respondent and its successors and assigns shall notify the Federal Trade Commission at least thirt (30) days prior to any proposed change in the corporation that may affect compliance obligations arising under this order, including, but not limited to a dissolution, assignent, sale, merger, or other action that would result in the emergence of a successor corporation; the creation or dissolution of a subsidiary, parent, or affliate that engages in any acts or practices subject to this order; the proposed filing of a bankruptcy petition; or a change in the corporate name or address. Provided, however, that with respect to any proposed change in the corporation about which respondent lears less than thirty days prior to the date such action is to take place, respondent shall notify the Commission as soon as is practicable after obtaining such knowledge. All notices required by this Part shall be sent by certified mail to the Associate Director, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, Washington, D. It is further ordered That respondent and its successors and assigns shall, within sixty (60) days of the date of service of this order, and at such other times as the Federal Trade Commission may rcquire, file with the Commission a report, in writing, setting forth in detail the manner and fonn in which it has complied with this ordcr. Decision and Order 124 FTC. VI.

It is further ordered That this order wil tenninate on September , 2017, or twenty (20) years ftom the most recent date that the United States or the Federal Trade Commission files a complaint (with or without an accompanying consent decree) in federal court alleging any violation ofthe order, whichever comes later; provided however, that the filing of such a complaint wil not affect the duration of:

A Any paragraph in this order that tenninates in less than twenty (20) years;

B. This order s application to any respondent that is not named as a defendant in such complaint; and e. This order if such complaint is filed after the order has tenninated pursuant to this paragraph.

Provided further, that if such complaint is dismissed or a federal court rules that the respondent did not violate any provision of the order and the dismissal or ruling is either not appealed or upheld on appeal then the order will tenninate according to this paragraph as though the complaint was never filed, except that the order will not tenninate between the date such complaint is filed and the later of the deadline for appealing such dismissal or ruling and the date such dismissal or ruling is upheld on appeal.

ALDI, INe. 213 207 Decision and Order APPENDIX A Dear Employment Applicant:

Our records show that you applied for employment at Aldi, Inc. at some time after Januar I , 1994. In assessing your job application in which you authorized us to check your credit record, our decision may have been based, at least in part, on infonnation obtained from the credit bureau identified below:

(NAME OF CONSUMER REPORTING AGENCY) (ADDRESS) It is important for you to know that a federal law, the Fair Credit Reporting Act, gives persons who are denied employment the right to know if the denial was based, in whole or in part, on infonnation supplied by a consumer reporting agency, commonly known as a credit bureau. " If so, the name and address ofthe credit burcau must be disclosed to the applicant.

Information in your credit report may have led us, at least in part to deny your application. Based on our actions you arc entitled to a free disclosurc of your credit report if you contact the credit bureau within (30) days. An extra copy of this notice is enclosed so that you may give it to the agency when you request to review your fie. A brochure explaining your rights under the federal credit laws is enclosed. If you want more infonnation about your rights, write to the Federal Trade Commission, Correspondence Branch, Washington C. 20580.

Thank you.

Decision and Order 124 FTC APPENDIX B Credit FAIR CRED IT REPORTING fj Federal Trade Commission BureuofConsurnerProtecn Ofce 01 Consumer & 8usinass Educ:tion (2)326-S5 Septmber1ggr APPE,,' IJIX B ( ICON HEALTH A0!D FITNESS, INC., ET AL. 215 215 Complaint