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The Federal Trade Commission has reached settlements with two regional grocery chains -- Aldi Inc., headquartered in Batavia, Illinois; and Bruno’s, Inc., based in Birmingham, Alabama, and which also does business under other names including Food World, Food Chain and Piggy Wiggley -- to resolve charges that they failed to tell job applicants denied employment when information in the applicants’ credit records played a role in the denials. The FTC also alleged that Aldi and Bruno’s prevented the applicants from getting free access to their credit reports to check for inaccuracies by failing to tell them the name and address of the firm that pro vided the credit-history information. The settlements would prohibit the chains from similarly violating the federal Fair Credit Reporting Act (FCRA) in the future. They follow several other cases the FTC brought against major national employers earlier in the 1990s, and are the first to emerge from recently-launched FTC staff investigations of regional employers.

The FCRA is intended to give consumers an opportunity, at no cost to them, to learn the contents of and challenge any incorrect information in their credit reports -- which contain infor mation about their credit and loan accounts, their bill-paying habits and certain other identifying information, and which are compiled by consumer reporting agencies. Under the law, when a consumer is denied credit, insurance or employment based in whole or in part on information in his or her credit report, the denying company must notify the consumer that the report played a role in the denial and also give the consumer the name and address of the consumer reporting agency that supplied the consumer’s credit report. Thereafter, the consumer can contact the credit reporting agency within 30 days to obtain a free copy of the credit report, check for errors and, if any are found, request that the agency reinvestigate and correct them. (Effective Sept. 30, 1997, revisions to the FCRA require that a firm notify an applicant that it may obtain his or her credit report before doing so, and to obtain from the applicant a written acknowledgment of this fact. Those revisions also require that a firm in this situation give the adversely-affected con sumer the telephone number of the relevant credit reporting agency and a statement of his or her rights under the FCRA to dispute the accuracy or completeness of the credit report.)

"Credit reports increasingly are used by employers in checking the suitability of applicants for employment," said Jodie Bernstein, Director of the FTC’s Bureau of Consumer Protection. "That’s legal under the Fair Credit Reporting Act, so long as the self-correcting mechanisms built into this statute are allowed to work. That depends on employers’ complying with their obligation under the law to tell applicants that they may obtain a credit report, notify applicants when a credit report played a role in a denial, and giving denied applicants the information they need to access and check their credit reports at no cost."

In the complaints detailing the charges in the FTC’s cases against Aldi and Bruno’s, the agency alleged that it was not the firms’ practice to advise job applicants when their credit reports contributed to a decision to deny applications or rescind offers of employment, or to advise these applicants of the name and address of the consumer reporting agency that supplied the reports, in violation of the FCRA.

The proposed consent agreements to settle the charges, announced today for public comment before the Commission determines whether to make them final, would require the firms to comply with these notification provisions of the FCRA in the future. Aldi also has agreed to give the information required by FCRA to consumers denied employment after Jan. 1, 1994, when appropriate. The names of the relevant applicants to Bruno’s stores are not availa ble, the FTC staff said.

The orders also contain various record keeping and reporting provisions that would assist the FTC in monitoring the respondents’ compliance.

Several free FTC brochures address the issues raised by these cases. "Using Consumer Reports: What Employers Need to Know," explains the FCRA, how employers can use credit reports and their legal responsibility to notify applicants when information in their credit reports influences a decision not to hire them. "Credit and Your Consumer Rights" is for consumers and provides information about how credit reports are compiled and used, who has access to them, and how the laws help ensure the accuracy and privacy of these reports.

The Commission votes to accept the proposed consent agreements for public comment in the Aldi and Bruno’s cases were 5-0. An announcement regarding the agreements will be published in the Federal Register shortly. They will be subject to public comment for 60 days, after which the Commission will decide whether to make them final. Comments should be addressed to the FTC, Office of the Secretary, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580.

NOTE: A consent agreement is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of $11,000.


Copies of the brochures referenced above, and the complaints, proposed consent agreements, and analyses of the agreements to assist the public in commenting in today’s cases are available from the FTC’s web site at and also from the FTC’s Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. Consent agreements subject to public comment also are available by calling 202-326-3627. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202- 326-2710.

Staff Contact: for Aldi:

C. Steven Baker
Chicago Regional Office
55 East Monroe Street, Suite 1437
Chicago, Illinois 60603

Staff Contact:for Bruno’s:

Tom Carter
Dallas Regional Office
1999 Bryan Street, Suite 2150
Dallas, Texas 75201

(FTC File Nos. 962 3064 [Aldi]; 962 3086 [Bruno’s])

Contact Information

Media Contact:
Bonnie Jansen
Office of Public Affairs
202-326-2161 or 202-326-2180