TO:   Chairmen Jason Lewis and Paul Brodeur and members of the Joint Committee on Labor and Workforce Development

FR: Deirdre Cummings, Legislative Director of MASSPIRG

RE: Testimony in support of S.985/H.3153, An Act Regulating Use of Credit Reports by Employers

April 4, 2017


Good afternoon. My name is Deirdre Cummings and I am the legislative director for MASSPIRG. MASSPIRG is a 40 year old, state-wide non-profit, non-partisan, member-supported consumer advocacy organization. Thank you for the opportunity to testify today in favor of S.985/H.3153, An act regulating use of credit reports by employers, filed by Senator Barrett and Representative Malia.

MASSPIRG strongly supports S.985 and H.3153, identical bills to limit employers’ use of credit reports in employment decisions. According to a 2012 survey conducted by the Society for Human Resource Management, 47% of employers check potential employees’ credit reports as part of the hiring process. And the practice has grown.

Credit reports should not be used in employment decisions for two primary reasons:

1.      Credit reports are full of mistakes. Government and industry reports all confirm that consumer credit reports are riddled with errors. Estimates of credit reports with serious errors vary widely, anywhere from 3 to 25 percent. A 2013 FTC study reviewed credit reports for 1,001 consumers; in the study one in four consumers identified credit report errors, one in five had a credit report modified after disputing an error, and one in 20 had errors serious enough to be denied credit or be forced to pay more.[1] Even a 1 percent error translates into millions of consumers, since there are at least 200 million files at each of the bureaus.

Further, correcting errors in credit reports has proven to be very difficult, time consuming and often unsuccessful.  An investigation by The Columbus Dispatch found that, of the people who filed complaints of inaccuracies with the Federal Trade Commission, more than half of them were unable to get the credit reporting bureaus to fix the error.

2.      Credit history does not predict job performance. There is no evidence to show credit reports can predict job performance. A representative of TransUnion, one of the “Big 3″ credit bureaus, admitted under oath that “we don’t have any research to show any statistical correlation between what’s in somebody’s credit report and their job performance or their likelihood to commit fraud.”

Basing employment on such an unreliable tool is unfair and should not be allowed. Eleven states have passed laws restricting employers’ ability to run credit checks on applicants and employees. MASSPIRG urges this committee to do the same and pass S.985/H.3153, An act regulating use of credit reports by employers.




[1] Federal Trade Commission, Report to Congress Under Section 319 of the Fair and Accurate Credit Transactions Act of 2003, December 2012, archived at

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