An adverse action notice is a letter which is usually sent between 7 to 10 business days after an individual may have been denied an application for credit, employment, insurance and other reasons. The notice provides individuals which agency prepared the report and even makes it possible for them to apply for and obtain a report if needed.
When organizations use the credit score of the individual when arriving at a decision, they are required to list the scores in the adverse action notice by including a minimum of two sources which may have contributed to the credit score. Organizations are not allowed to charge for the credit scores when providing them the same.
Adverse action notices are similar to letters that are issued to recipients as notice of action being taken or initiated against them. Businesses and employers are also provided with the powers necessary to provide adverse action notices either to their employees and their counterparts in the business who may have requested for credit facilities of any type.
An adverse action notice provides recipients with information of something in their history which is denying them the benefits they are seeking for and provide them with information about who informed the organization about the adverse comments on their reports. It should, however, cause no problems to the recipient unless he or she looks forward to rectifying or disputing the adverse action notice.
Adverse action notices can be used for various applications such as credit, loans, employment, and even by landlords and tenants when needed by them and therefore quite a few templates can be found which will be suitable for individual circumstances. These letters are just informing the recipients that they have been denied some benefit because of certain drawbacks in their history.
What Are The Features of An Adverse Action Notice?
- These letters are similar to notice period letters which are forwarded to the recipients but they need to be provided with information about any actions which will be initiated against them.
- The recipients must be informed of the agency which created the report and also provided its contact information in order to ensure that the recipient has an opportunity to verify the findings or even explain them.
- An adverse action notice can apply to various applications which could be diverse and consider instances like employment, credit, and loans Etc.
- The recipients may be served these action notices for bad credit or consumer histories as well as criminal records.
Let us now consider samples of adverse action notices which can be used for a couple of reasons mentioned above. However, it must be understood that one can come across different situations and therefore the type of letter drafted should confirm with the individual requirement.
Sample Letter Of Adverse Action Notice By Organization To Candidate or Employee
name: [name of organization and address].
[To Candidate/Employee, Designation, Name of Organization.]
Subject: Final Notice Of Adverse Action.
Further to the authorization provided by you, we obtained a consumer report prepared by [name of agency] to verify your application for employment, retention and/or promotion. This letter is to notify you of our decision not to employ/retain or promote you solely based on the information we have collected from your consumer report.
The report was provided by [agency name, address, telephone numbers, Etc.]
The actions we have initiated were not suggested by the agency and neither did they prompt us to initiate them.
You have the right to obtain a free copy of your consumer report from [agency name] under the fair credit reporting act by making an application for the same within 60 days of receipt of this letter.
You also have the freedom to contact [agency name] if you wish to dispute the accuracy of the report, the completeness of any information or for any other clarifications you may need to rectify or improve your consumer history.
[name of signatory].
Adverse Action Notice For Tenant-General
[Property Name, Address, And Names of Owner, Agent, Landlord:]
The primary purpose of this adverse action notice is to intimate you that your application for renting the property specified above does not meet our requirements and that negative and adverse actions have resulted following the application as detailed below:
The application for renting the property failed to meet our requirements in one or more of the reasons mentioned below. The checking of the box [–] indicates the precise reasons why we have decided to issue an adverse action notice to you.
[–] Your rental history is unsatisfactory.
[–] You have provided false and inaccurate information.
[–] The application form is incomplete.
[–] You do not have the insurance as required by the landlord.
[–] The information you have provided is not verifiable.
[–] Your income is insufficient to meet the rental requirements we have.
As your rental application does not meet our requirements we have decided to:
[–] deny your application.
[–] Demand an additional deposit for the property as well as a consigner before the execution of the rental agreement.
We wish to inform you of the following in addition to the above:
[–] We are returning the charges for the screening.
[–] The screening charges are not being returned.
[–] No screening charges were demanded or paid by you.
The report which resulted in the adverse action notice was provided by [name and address of the agency]. You have the liberty to contact the agency to verify any information mentioned in the report and also to dispute its accuracy within 60 days of receiving this letter. You also have access to certain provisions under the credit reporting and consumer protection laws within the state for which you can contact your local agency for consumer protection to initiate actions.
[landlord name and date of notice].