Unauthorised Credit checks-HR or legal employment professional please help!

[Pradaqueen]

Hi I am asking this on behalf of my friend who doesn't use mumsnet but would be grateful for any HR or solicitors' advice out there!

She has worked as a senior assistant at a company (large international insurance firm) for over 5 years, no issues. She does not work in accounts or finance nor does she handle any money. Said firm has merged recently with another major insurance firm who appears to have the controlling stake. The controlling firm insists on all its employees having a credit check. Fair enough. However, Without any existing employees knowledge or prior consent the controlling takeover firm have credit checked the existing employees of the firm it took over. My friend's IVA has subsequently come to light and she has been called in by HR which was pretty embarrassing given that it is a private matter. She had't told anyone at work about this -frankly why would you? Prior to speaking to her HR informed her line manager who apparently was quite uncomfortable about this. My friend did have some money issues and like many took an Iva as she thought it was her only way out of a pay day loan disaster situation. She has now discovered that this IVA is affecting many areas of her life but cannot afford to buy herself out of it. She is 2.5 years into a 5 yr agreement.

Her question is, is this right that a firm can delve without consent into her private affairs? She is sick with worry that another credit check might look like she was trying to obtain credit when she wasn't.

Can anyone advise if this is a legally correct thing for a company to do without permission?

Thanks ever so for any advice!

[DuchessofAnkh]

My experience of working in Banking and finance (or any industry involving money!) is that it is Gross Misconduct , and in the contracts, to have Defaults, IVA's, Bankruptcies and financial irregularities are dealt with severely.

I would suspect she may have signed a new contract or been TUPE'd over and that gives them the authority - she needs to check any paperwork she has been

She needs to get this sorted ASAP as it may be a disciplinary offence, and possibly immediate dissmissal, it certainly would have been where I worked.

I am NOT a lawer or qualified by any way BTW

[Pradaqueen]

Thanks Duchess. She is aware of the rules for banks but this is insurance. She hasn't ever been told she needs to declare any changes to her circumstances but obviously wouldn't ever lie as she is aware of the cost. It is more of the shock and worry factor about the fact that her coworkers may be aware of a private matter. I'll get her to check her tupe paperwork though but don't think she had to sign a new contract.

[DownWithThisTypeOfThing]

She is aware of the rules for banks but this is insurance

Are insurance companies not bound by the same code? I'd have assumed they were because of the potential for fraud but no idea really.

No idea and hope someone can advise but will watch thread as interested to find out.

[Blistory]

IVAs are a matter of public record so anyone can look them up. A credit search without consent is another matter.

[thatstoast]

A few things:

Have you the actually done a credit search? Or have they just searched for public info such as electoral role, bankruptcies/ivas/ccjs?

If they have done a credit search then they should be performing a 'soft' search. This means it will not be visible to other organisations.

They should have sought permission. However, in this case permission would be probably tacit by way of it being in the company rules and her continuing to work for them. If she had refused, she may have been dismissed.

Only HR and the relevant managers should be aware, which seems to be the case. Obviously if this information has been passed on to other colleagues then she has cause for complaint.

What was the discussion with HR? Have they implied she will be dismissed? Or have they just asked for information regarding the circumstances? Financial organisations are usually happy if an employee is committed to paying off their debt in an appropriate manner. Trying to avoid responsibility for the iva and the debt accrued will be frowned upon.

[Fizrim]

I agree with thatstoast, I think it will be a requirement of employment - difficult to say without seeing the paperwork but I'd have also thought that insurance firms had the same kind of rules as banking. So I think she should probably have declared the IVA to her company at the time (the previous owners, before the merger). Although if she didn't have to declare it she could point this out to the new company. And contact her union, if she has one.

What have they said to her about it? I would also assume that if she'd refused the credit check she'd have been dismissed?

I hope it works out for her.

[Pradaqueen]

Thanks all, hoping someone can shed more light on the legality. Definitely a full credit search not soft and no consent sought...