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Two casinos denied consumers jobs based on their credit reports, without informing them of their rights under the Fair Credit Reporting Act (FCRA), according to the Federal Trade Commission. The defendants have agreed to pay $325,000 in civil penalties and are barred from future FCRA violations.

According to the FTC’s complaint, Las Vegas-based Imperial Palace, Inc. (d/b/a Imperial Palace Casino) and Biloxi-based Imperial Palace of Mississippi, Inc., ask job applicants to sign a release form authorizing the defendants to obtain the applicants’ credit reports, then review each credit report and use a “Background Form” to rate the applicant as either “Poor,” “Fair,” or “Good.” Based on this rating, the applicant then is recommended as “Favorable” or “Unfavorable.” The FTC alleges that, in many cases, the defendants’ decision not to hire a particular applicant was based wholly or partly on information contained in his or her credit report – the FCRA defines this practice as “adverse action” against the applicant.

The FCRA requires that before taking adverse action against a current employee or job applicant based on information in the individual’s credit report, the employer must give that individual a copy of the report and a written description of his or her FCRA rights. After it takes adverse action, the employer must provide the consumer: (1) notice of the action taken; (2) the name, address, and phone number of the credit bureau from which the report was obtained; (3) a statement that the credit bureau did not make the decision to take the adverse action and cannot provide specific reasons why it was taken; (4) notice of the consumer’s right to obtain a free copy of his or her credit report within 60 days; and (5) notice of the consumer’s right to dispute the accuracy of the information in his or her credit report with a credit bureau. The FTC charges that the defendants failed to provide applicants with the required notices.

The proposed consent decree bars the defendants from taking adverse action against current employees or job applicants based on information in their credit reports without providing the FCRA-required notices. The decree requires the defendants to pay a civil penalty of $325,000. The proposed decree also contains standard recordkeeping provisions to assist the FTC in monitoring the defendants’ compliance.

The Commission vote to refer the complaint and proposed consent decree to the Department of Justice for filing was 5-0. The complaint and consent decree were filed on July 13, 2004 in the U.S. District Court for the District of Nevada by the Department of Justice at the request of the FTC.

NOTE: This consent decree is for settlement purposes only and does not constitute an admission by the defendants of a law violation. A consent decree is subject to court approval and has the force of law when signed by the judge.

Copies of the complaint and consent decree are available from the FTC’s Web site at and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

(FTC File No. 0323050)
(Civ. No. CV-S-04-0963-RLH-PAL)

Contact Information

Media Contact:
Jen Schwartzman
Office of Public Affairs
Staff Contact:
Ronald G. Isaac
Division of Financial Practices