We’ve all received robocalls. They’re annoying, irritating, and more than that, they’re illegal. If you’re receiving unwanted calls or solicitations from a business then you might be able to receive compensation. That’s where a consumer protection attorney like Jared Lee comes in.
This week Jordan and Jared sat down and discussed some of the ways consumers can be targeted by companies who would wish them harm. They also discuss how businesses can make sure they’re doing what is right when it comes to protecting their clients’ data and personal information.
There are areas where a small business owner needs to make sure they’re following the law, and you need to know what they are before you make a mistake that could lead to a lawsuit. Jared is an attorney who can help.
Jared is the Managing Partner at Jackson Lee | PA, joining forces with his wife after a stellar career at one of the most prominent plaintiff’s firms in the nation. He’s done ridiculously impressive things like served as the chair of Florida’s Consumer Protection Committee and completed a 70.3 Ironman, but hasn’t yet convinced a college football referee to change a horribly bad call. This has not prevented him from vocally expressing his opinions on such calls at games. No one can deny his commitment to pursuing what is right. This is what makes him an outstanding consumer protection attorney.
Long before the beard, Jared attended Florida State College of Law (Go Noles!), where he made a commitment to use his legal education to help people. That quest led him to a brief stint as a public defender before he discovered his true passion in consumer protection law. Since that time, he’s had the privilege to represent consumers in obtaining sizable recoveries through trial, arbitration, and settlement, including multiple seven-figure outcomes. He’s also become the father to four (you read that right!) spunky daughters.
Episode 13: Consumer Protection Lawyer Jared Lee of Jackson Lee, P.A. – Full Transcript
This call is from the Department of Social Security Administration. The reason you have received this phone call from our department is to inform you that we just suspend your social security number because we found some suspicious activity. So if you want to know about this case, just press one Thank you.
Picture a world where costs are down, profits are up, and customers are clamoring at your door you’re listening to; Let’s Get Up To Business from Jordan Law. Our interviews with business owners, service providers and area experts can teach you how to create a world of success and profitability. If you’re looking for an attorney to assist in your business formation, employment agreements, or other legal business needs, contact Jordan law at 407-906-5529. You can also reach us on the web at Jordanlawfl.com. Jordan Law, we protect you and your business.
Jordan Ostroff 1:17
Hello, and welcome to Let’s get up to business with Jordan law. Joining me today is Jared Lee of Jackson, Lee, pa Jared, can you please introduce yourself to our listeners?
Jared Lee 1:25
Absolutely. As you said, my name is Jared, I do consumer protection law at the law firm of Jackson Lee pa my wife and I practice law together and I joined her at her firm here about a year and a half ago. Prior to that I was at a large central Florida law firm that does a lot of personal injury and I did consumer protection work there have done consumer protection work is the primary focus of my practice for about the past 10 years. Ruth, my wife and I teach consumer protection law course at Florida State College Florida. We also teach a master’s level course in workplace privacy and cyber security there.
Jordan Ostroff 2:06
So and other than the fact that he’s a big Seminole fan, I do think he’s a genuinely great guy.
Jared Lee 2:11
Well, you know, every Not everyone can be perfect. And I will forgive you for many of your loyalties there.
Jordan Ostroff 2:17
Fair enough. So, you know, it’s interesting, because normally, I always tell people, all right, so give us your contact info first. But as a lawyer who still doesn’t really understand what consumer protection stuff is, can you tell us just you know, the the 10,000 foot view of consumer protection, and then we’ll have you do your contact info once that clicks for people.
Jared Lee 2:36
So the difficulty for consumer protection law is that it touches so many aspects of your everyday person’s interactions with businesses. When you look at consumer protection law, you first have to understand what is a consumer and and said JFK once said, “it starts by understanding that a consumer by definition includes all of us.” Every day, we engage in dozens of consumer transactions every time you swipe your credit card or make a purchase, that is likely a consumer transaction Not to mention, the times you have issues with privacy, the purchases, you make the credit reports that are pulled on you all of that touches in consumer law. Unfortunately, because that’s a very broad umbrella, there are a number of different silos or or areas of focus within consumer protection law, I deal with a lot of credit reporting issues, a little bit of collection, harassment, helping people when they are being harassed by a debt collector, and also dealing with privacy issues and cell phone usage, robo calls and things of that nature.
Jordan Ostroff 3:48
So basically, we’re looking for an individual person who’s getting mistreated or harassed by a business or a larger corporate entity,
Jared Lee 3:56
Correct. Most all of the cases we handle an individual person that is interacting with a business, generally a larger business, a bank or a finance company. But in theory, any interaction between an individual and a business that’s providing a service, or a product has some aspect of consumer protection law involved in that transaction.
Jordan Ostroff 4:20
Alright, so with that being said, What is the best way for people to get in contact with you?
Jared Lee 4:26
So they can always call my office at 407-477-4401. Or my email address is Jared, J_A_R_E_D at Jackson Lee PA com?
Jordan Ostroff 4:38
Now I know I’m you know, our podcast is marketed really for the business owners, most of your clients are going to be the consumers mistreated by the businesses, is that right?
Jared Lee 4:46
Well, most of my clients are people who are mistreated by businesses. But consumer protection law is intended to protect, and even the playing field among businesses. So business owners have two reasons that primarily interested in consumer protection law. One is they don’t want to violate those laws and two, if their competition is violating those laws, they want to even the playing field, so they don’t have to act inappropriately to be able to compete against those companies.
Jordan Ostroff 5:18
So that being said, there is nobody in my life that I more frequently talk to about things and realize, oh my god, I never knew that was a huge problem. So I know, I’ve learned a lot from this from talking to Jared, as a business owner, and I hope we’ll have the same thing for our listeners. So before, before diving in, I know you mentioned that there are multiple different silos of consumer protection law mean, what are the most common ones, and then we’ll just kind of go through those one at a time?
Jared Lee 5:43
Well, there are a couple different ways that I like to think about it. Generally speaking, the there is the process of getting into the deal. There’s advertising solicitation, and other issues with data collection before a deal happens, that are protected by Consumer Protection Law. Then there’s the deal itself, there’s creating the deal, fraud within the process of a deal, misrepresentation, concealment of relevant facts, things of that nature. The next stage is, of course, often funding the deal and finance agreements. And so there’s an aspect of consumer protection law that deals with finance agreements, most people are familiar with seeing Truth in Lending Act disclosures. The Truth in Lending Act is part of the broader umbrella of consumer protection long what has to be disclosed so that consumers can properly shop for credit. And of course, if you’re a business that is offering credit, you want to be able to comply with those disclosure requirements. There’s an aspect of consumer protection law and breaking the deal. And that would be when a company doesn’t live up to their end of the bargain, what they agreed to whether it’s a written contract, or a services being offered something of that nature. And of course, where the consumer doesn’t live up to their into the bargain. And that can include collection actions and things of that nature. And then finally, there’s a privacy aspect, it’s a really growing part of consumer protection law as data is becoming more and more valuable in the marketplace. And so there’s there’s issues with data breaches and data collection, what is appropriate, what is not what level of security data has to be protected in, and other aspects of specific types of data privacy, including your credit report, your medical information, making calls to a cell phone, things of that nature can all invite involve privacy implications.
Jordan Ostroff 7:46
And so you know, I’ll take a special shout out for Equifax Equifax, bought me a very nice dinner a couple weeks ago after they data breach, but we’re not talking just about giant companies like that, right? We’re talking about mom and pop shops, or potentially can potentially be hid under some sort of consumer protection action, right?
Jared Lee 8:03
Absolutely. If you are collecting data on your customers or consumers that interact with your customers, your business, you have an obligation to provide some level of protection for that information. And all of these different aspects of creating a deal getting into a deal financing a deal, those protections are often equally applicable to small companies, Mom and Pop companies as as they are large international corporations.
Jordan Ostroff 8:31
Alright, so then let’s just go down the line chronologically mean, what are some of the major issues you see when it comes to the you know, that beginning phase that getting the deal, the advertising part?
Jared Lee 8:40
So a common area of of problem in advertising, is misrepresenting the price of an item. And that can happen in a number of ways. Many times consumers can show up at a business, and the price there is different than what was advertised online. And that could potentially be an issue under the Florida unfair and deceptive Trade Practices Act.
Jordan Ostroff 9:05
So I mean, every car experience I’ve ever had, where the price and their advertisement is not what’s the one at the lot.
Jared Lee 9:12
I would say that 80% of the calls we get at our office involve auto deals gone wrong in some way. But yes, it is actually per se violation of the Florida unfair and deceptive Trade Practices Act to sell a vehicle for a higher price than it was advertised for.
Jordan Ostroff 9:31
Okay, what are some of the other major? I mean, obviously, Look, don’t tell somebody something, cost something and then tell them differently when they show up. But what are the other issues that you come across consistently at that advertising stage?
Jared Lee 9:43
So misrepresentations in in the quality or, or what is involved in that deal? So, for example, going back to your auto dealer situation, situations where vehicles are advertised, it’s being an specific mechanical quality, that that the dealer or seller knows it’s not the case.
Jordan Ostroff 10:07
And so would that, would that cover something where even the buyer doesn’t know about it afterwards? like lemon long or something?
Jared Lee 10:14
So there are situations where a where a buyer finds out after the fact about a problem that was concealed? That would be actionable? Yes.
Jordan Ostroff 10:22
Okay. Any other major problems you see consistently from the advertising stage?
Jared Lee 10:29
Well, there are privacy issues. And some one of the problems that we frequently will see is where advertising companies get a hold of information that should be protected by the Fair Credit Reporting Act. And, and utilize that to advertise and target people, specifically, but that’s, that’s more difficult for the average person to identify in their own situation. Of course, if you’re a business, and you’re advertising and you’re getting data from different sources, you need to be cognizant of where that data is coming from, and whether you have obligations as a user of that data.
Jordan Ostroff 11:07
Okay, so I think it makes probably the most sense for us to do privacy towards the end, because that’ll kind of govern everything else is that right?
Jared Lee 11:14
Privacy is kind of a overarching area that touches on a lot of different things.
Jordan Ostroff 11:19
Okay, so then, so after the advertising stage, the next one was, you know, the the beginning of the deal, what are the major issues that come up there?
Jared Lee 11:27
So it kind of in a continuation of the advertising stage, sometimes misrepresentations occur in the advertising stage, get a person into the business to have the transaction, other aspects of misrepresentation. And it doesn’t necessarily need to be with the intent to defraud, but a misrepresentation or concealment is a very important aspect of of consumer protection when you get into the deal itself. For example, failure to disclose a known fee, that you as a business owner going to tack on to every deal can be an unfair and deceptive trade practice.
Jordan Ostroff 12:09
What about the timeshare thing? You know, I think I’m getting a fancy steak dinner or cheap Disney tickets and then three and a half hours later after being sold timeshares, that’s something that would be potentially a consumer protection issue,
Jared Lee 12:20
it would be a consumer protection issue. And so you know, whether or not that situation is inappropriate, probably comes down to it’s one of those devils in the details situations where the the nature of the misrepresentation is going to have a lot to do with how actionable it is.
Jordan Ostroff 12:38
Gotcha. All right. Any other major things, you see it that getting people to the deal stage,
Jared Lee 12:42
Not a tremendous amount, we could probably dive into different aspects of that deal process. But it might get boring to go into all of that.
Jordan Ostroff 12:52
What sounds like I mean, a lot of this stage, we’re talking common sense, you know, somebody saying one thing and doing another that might be a problem.
Jared Lee 12:58
It is, and many times common sense is a very good protector. From the business side of things. If if this is something that you would want disclose to your grandmother when she walks into the business, you should probably be disclosing it to your customers.
Jordan Ostroff 13:14
Okay, so then, as we get through the deal, I mean, are we looking at that same common sense standpoint? Or what point do we get into some of the more interesting intricacies?
Jared Lee 13:25
Well, a lot of times when you get into the financing or funding stage of a deal, there are a lot of intricacies that common sense doesn’t necessarily help you prevent. The biggest thing is for those that are offering credit, extensions of credit, either directly or through a finance company, need to be cognizant of their obligations for disclosure under the Truth in Lending Act. And those vary depending on the type of financing being offered. There are other things that aren’t necessarily common sense, if you’re engaged in door to door sales, you need to be aware that there are specific Florida acts that regulate a consumers right to cancel. So if you’re selling anything, door to door sales, and sometimes this also applies to like a car dealer that’s doing it off site 10 promotion or something of that nature, Florida law allows a 72 hour cooling off period that right to cancel must be written into your contractor agreement, or you could be violating a consumer protection statute there. In the context again, of financing. The the Truth in Lending Act governs how interest rates are disclosed to consumers. On an annualized basis, people are used to seeing the APR, on their financing as a way of comparing also significant fees and things of that nature must be disclosed as part of that agreement.
Jordan Ostroff 14:56
To people still go door to door, they’re still door to door salesman that still are salespeople
Jared Lee 15:00
Door to door sales still happen. They’re prevalent in a couple of industries, water soft nurse, or particularly prevalent in door to door sales, solar panels currently are a hot topic, and then
Jordan Ostroff 15:14
Jared Lee 15:14
Yes, and then actually gets into an area of consumer protection that’s still developing. And that’s regarding the pace loans, which most consumers are unfamiliar with. But pace loans are a form of financing that gets wrapped into your tax bill. And you will find you will find your payments being extracted with the full penalty of your property taxes. And actually some of those loans transfer with the property itself when you sell it. So there’s a lot in the context of pace loans. That is it’s developing in the consumer protection arena,
Jordan Ostroff 15:51
That’s going to be for solar panels,
Jared Lee 15:53
solar panels and other upgrades that involve improving energy efficiency, at least in every so many of the companies that go door to door selling new windows solar panels further installation, are looking to those pace loans as as the way that they are going to fund the deal.
Jordan Ostroff 16:13
Gotcha. All right. So then, I guess that sort of gets us through the formation of the deal stage. I mean, we’ve got the, the we don’t have the deal in place for a lot of these issues, right.
Jared Lee 16:27
So most of that is part of doing the deal itself and funding the deal kind of two sides of the same coin.
Jordan Ostroff 16:34
And I’m assuming a lot of different industries are going to be more have more potential consumer protection issues.
Jared Lee 16:43
Absolutely auto deal. dealerships deal with a tremendous number of consumer protection issues. Both because every deal involves almost every deal involves an individual consumer, almost every deal involves financing. And many times you’re selling an imperfect product, and there’s a tremendous amount of room for for miscommunication or potential concealment of the quality or condition of what you’re selling.
Jordan Ostroff 17:16
Which I always go back to what is it in Fargo where they they remove the undercoating and that was like a 1200 dollar charge for something that didn’t really exist, right?
Jared Lee 17:23
Yeah, no, it’s it’s there are many things that are that are frequently tacked on to a deal that are either have very minimal value or or no value whatsoever.
Jordan Ostroff 17:36
So when we’re talking about credit, you know, obviously a lot of our clients are coming to us on payment plans where they’re putting them in a mountain down. And we’re sort of internally financing the rest of it for them to pay off at a lower at a you know, by weekly payments or whatever. Is that considered credit under the Fair Credit stuff? Are we talking more, you have to be outliving money from a third party or something along those lines.
Jared Lee 17:59
So potentially your collection of unpaid fees could be covered under some of the collection statutes.
Jordan Ostroff 18:08
Now you’re talking about all of our clients always pay us 100% of
Jared Lee 18:12
ISS, I know but for other firms in your position that may be involved in in collecting unpaid fees, some of those fees may be considered a consumer debt. And so every business that is collecting outstanding bills in Florida should be aware of the Florida consumer Collection Practices Act. And that statute, while similar in some ways to the Fair Debt Collection Practices Act is broader and an application it applies not just to professional debt collectors and it applies to any company that is collecting a consumer debt. And a consumer debt is any any kind of debt that arises from a personal Family or Household obligation. So that statute basically ladies 19 different things, and I’m not going to go into all of them, but 19 different things that should not occur in the collecting of consumer debt. A lot of them are common sense you shouldn’t harass or abuse someone. It is fairly common sense that you shouldn’t be you know, abusing someone now abusing someone can include such really egregious things like threatening to have them arrested when you have no ability to to have the person arrested.
Jordan Ostroff 19:31
That’s every robocall I’ve ever gotten,
Jared Lee 19:33
I tell you there are a tremendous number of scam robo calls. And so some of those restrictions are more or less common sense but involve a really more strict timeframe. For example, you shouldn’t be making collection calls before eight in the morning or after nine o’clock at night. That’s fairly common sense in a broader sense. But it makes not be common sense that that 905 it’s in violation but 855, it’s not.
Jordan Ostroff 20:05
And is that going to be based upon the zip code of the consumer or the business or the collector or
Jared Lee 20:13
Generally speaking, it’s going to be based on where the consumers located, there is some cable and other regulations under the Fair Debt Collection Practices Act that implicate the zip code, the area code being used by the debt collector until they are informed otherwise, as a basis for when they are, are able to collect those debts. But of course, when you know, the person’s address, you know, you can you should default to that address that they live at versus their their area code.
Jordan Ostroff 20:48
That’s why I always outsource my debt to some some time frame that is 12 hours away, so I can catch them half the day. Now I’m just kidding. Um, okay, so we’ve got the Fair Debt stuff, I mean, that’s obviously gonna be a big thing. From from the standpoint of what you’re seeing, I’m assuming most of the time it’s going to be third party debt collectors where it’s contracted out right?
Jared Lee 21:10
There. Certainly, third party debt collectors are a major aspect of of the potential violations of those statutes. And the Fair Debt Collection Practices Act, the Federal act is is geared towards those third party debt collectors. But here in Florida, we also see issues in for banks, credit unions, and other types of financing companies that do finance their debt, their own debt, be it Buy Here Pay Here, auto dealers, or, you know, sometimes even mom and pop shops that are trying to get into a financing area with without doing their due diligence and advanced as to what they shouldn’t shouldn’t do.
Jordan Ostroff 21:52
So if I sell my debt or if I outsource my debt collection to a third party, I can still be liable my business or on passing off the liability.
Jared Lee 22:01
So there are certain there are safeguards that can be put in place to try to protect you. But often, a third party that is collecting on a debt that you still own, you will have some form of agency liability for their actions. And you want to if a company is collecting data on your behalf, that you own and you control the their you know, when they start and when they stop collecting that debt, you definitely want to do your due diligence for that company to make sure that they are not a frequent violator, it is far cheaper to pay a higher rate for your debt collection than it is to defend lawsuits for their violations.
Jordan Ostroff 22:41
Yeah, absolutely. I mean, that, as we always tell people, you know, the ounce of prevention is worth a pound of cure.
Jared Lee 22:46
Jordan Ostroff 22:48
Are there any other you know, quick major things for a business owner to think about before they’re outsourcing that debt collection? Or is it really going to be that common sense case by case type thing.
Jared Lee 22:57
So one other statute did some important to know for a person that’s outsourcing their debt collection, it’s the Telephone Consumer Protection Act. And this is the robo call statute. And it is becoming increasingly cheaper for companies to implement the use of of robo calls are predictive dialing within their own business. But even more so when you outsource to a third party, you need to be aware of whether or not they are using an automatic telephone dialing system, either pre recorded messages, or other forms of computerized dialing to make those calls. There can be agency liability for that depending on the nature of your relationship with the the collection company. And because the the fines in that arena can mount quickly they the statutory penalty for a violation of making that automated call, or a pre recorded call to a consumer cell phone without their consent, that’s a $500 per violation. And each call can be a violation. So we’ve seen situations where companies have made hundreds or thousands of calls, without consent or after consent has been revoked. And so sometimes that can flow back to the original business. But also, most competent debt collectors are also going to be inquiring as to whether you collect a consent to call that cell phone. Using a predictive or automated dialer, when you obtain the number. If you are googling your clients phone numbers and using that number to then pass it off to a debt collector, for them to be collected from you potentially put yourself in the path for a violation there.
Jordan Ostroff 24:49
Alright, so we’re concerned about how we get the data, we’ve got to be concerned about what time they’re calling, you know, any other major things that we that are quick and easy for us to be concerned about as the business owners getting rid of that data or selling that
Jared Lee 25:01
right? Yeah, no, from a perspective of selling again, due diligence is the biggest thing from a perspective of collecting your own debt. Remember to generally don’t represent yourself at something that you’re not if you are not law enforcement, don’t represent yourself as such, and don’t use words that would make that implication such as, don’t have, have your collection agents refer to themselves as investigators. And there needs to be care in, in when you’re making communications, be it in writing or on the phone, that you’re not unintentionally disclosing that debt information to third parties who don’t have a right to access that information. You should not be sharing that. john smith owes a debt with his grandmother who happens to answer the phone.
Jordan Ostroff 25:56
Good to know. Alright, so I want to get over to something that you and I have talked about before, and I don’t really know how to do it. So I’m just going to make a hard cut here. I know you and I have talked about quite a bit on the issue of doing background checks on potential employees, and there’s way more liability on a business than I would ever think of even in an at will state like Florida.
Jared Lee 26:17
Absolutely. And that’s governed by the Fair Credit Reporting Act. And I think it’s you’ve discussed in some of your prior podcast there, there’s issues from a perspective of the ADA when when those checks deal with medical information and things of that nature. But we’ll focus more on the Fair Credit Reporting Act here.
Jordan Ostroff 26:37
Where it goes back to those silos for consumer protection. Where’s that falling in?
Jared Lee 26:42
So the Fair Credit Reporting Act is is a statute that actually stretches across a number of different aspects of consumer protection, it can be involved in the sale and advertising, again, with how information is is obtained for market purposes, it often is involved in the financing stage, and that people pull credit as part of approving a deal and as such their users of credit information and governed in that they and then for companies that prepare background checks or other forms of consumer report, they have significant obligations under the Fair Credit Reporting Act, and how they put that information together. And I put that more in the privacy category. So the Fair Credit Reporting Act kind of stretches over many of those stages of the deal. But for purposes of our conversation, we’re talking about employers using background checks. And so it background checks in the employment context are quite common. In fact, some of the studies I’ve seen show that 97% of employers use some form of background check in the hiring process for at least some of their employees. And so when you’re utilizing informations collected and gathered by a third party for purposes of deciding whether or not to hire someone, whether or not to promote someone, or comparing two candidates to each other, that information is governed by the Fair Credit Reporting Act. Now, the name of the Fair Credit Reporting Act doesn’t screen out, hey, employers, be careful. Because you think credit reports you think Equifax, Experian and Trans Union and what is my score, but any kind of background check, even if you are hiring a third party to do the reference checks and make calls and prepare a report of the information that is provided by those references. That report can be considered a consumer report when it’s being used for employment purposes like this. And so there are a number of different obligations of an employer. The first of those being that you need to disclose and get the consent of the potential employee or your current employee before using a a report that governed by the Fair Credit Reporting Act. Most of the time, that is done in the hiring process where the employer has a disclosure that they have the employee sign for a background check to be done, or if they’re in a financial field, sometimes a credit report is pulled as well, that needs to be done in a standalone disclosure, one of the most common violations that we see from small companies in companies that don’t have either a significant in House Counsel presence or or are potentially not having their employment process checked by out outside counsel is that they’re getting their form from the company that’s preparing their background check, and that that background check company is giving them language. And they are cutting and pasting that language into other documents that gets signed along the way. It there is a requirement that that notice, which also includes notifying the consumer of some of their rights under the Fair Credit Reporting Act, that notice needs to be a standalone disclosure. This is not the place to add a waiver of liability, this is not the place to add an arbitration clause. And this is not language, you want to tuck into a big 50 page document it needs to be a standalone document.
Jordan Ostroff 30:28
So do you have a copy of a of a good one and maybe also have a bad one that we can post in the show notes? Or is that going to be very specific
Jared Lee 30:38
I can get you that I can definitely the FTC has some examples of good disclosures. And the language is largely formulaic. As far as examples of bad ones, stick with what the FTC says to do. And that’s the safest and easiest way, don’t put other things in there. And I can provide examples, bad ones. But really, anytime you are trying to add to the standard default is a bad idea.
Jordan Ostroff 31:09
Alright, so we’re going to include a URL when we go through and edit this, that will have a link to the show notes page that will have those examples. Because as you’ll find out as we go through this, I mean, this could be it could be hundreds of thousands of dollars in terms of liability for your business, right?
Jared Lee 31:24
It can be. And there are a couple different ways that that can open up significant liability. And this is actually just one of three different notices that the employer needs to be aware of. We’ll get to those in a minute. But anytime you’re using a form that violates the wall, every single employee or applicant that you have signed that disclosure on it has a potential action on the Fair Credit Reporting Act a willful violation, the statutory damages alone, not to mention actual damages that may be recoverable range from 100 to 1000 thousand dollars per violation.
Jordan Ostroff 32:01
So that means even if I hire the person, even if they get the job, I’m still could be on the hook for three to four figures.
Jared Lee 32:07
Absolutely. And it is a area where a violation is very easily addressed by a class action mechanism. Because you have the same violation being done to other people, the same form being used across the board, it becomes a really easy area for a business to expose themselves to significant liability, through carelessness.
Jordan Ostroff 32:35
So all right, we’ve got to have the standalone disclosure, meaning there has to be there has to be the only disclosure on its own page, its own document its own, it has to literally stand alone, right,
Jared Lee 32:44
It has to literally stand alone and it on its own page, it’s that the way to do that.
Jordan Ostroff 32:50
Any other thing we need to know before we talk about what happens when the results come back,
Jared Lee 32:54
nothing that before the results come back. But when those results do come back, you need to be careful in the timing of how you utilize that information, particularly in a situation where there’s something on that report that is causing you to have a more negative view of the employee or their potential employee. And so the statute requires employers who are using background checks or credit reports to provide what’s known as pre adverse action notice. And that means you need to provide a notice to the consumer that there is something in that report that that is causing you to look at them less favorably, and give them a chance to to be aware of first that that report exists. And to that the that the who the company is that put that information together before you go and take an advert it’s action, like removing the job from them taking a promotion or way that was going to come their way. Thanks to that nature.
Jordan Ostroff 34:00
So does it need to be, hey, on this date, we pulled this information from this place, and it showed you how to DUI or can it just be we pulled the information on this date. And there’s something in there that we’re going to use negatively
Jared Lee 34:13
The second of those options that something is in there that that is now not not that employer can’t disclose more, it’s certainly fine. And most times preferred for the employer to provide the full report at that time to the employee, but that is not required at that stage was required is there’s a report, there’s something on there that is influencing our decision in a negative way. And here’s the company that put the information together. And I can provide you a sample pre adverse action notice letter that we can include in the podcast materials as well,
Jordan Ostroff 34:52
Jared Lee 34:54
So we’re in years getting into trouble here is they will look at a report go, this is obvious, we’re not going to hire this person, let’s move on let’s go to that candidate be offered them the job. And hey, get that letter out in the mail. And so that’s that is wild time consuming. You You’re supposed to provide that that pre adverse action notice in advance of making a decision and negative decision towards that employee. The FTC says five days it’s the target, but the statute itself doesn’t have a strict timeframe. And so courts can kind of look at reasonableness, but the FTC five day standard is probably the minimum I’d ever advise a business to go for
Jordan Ostroff 35:41
that being five days from when you send a letter until you actually take the action
Jared Lee 35:46
Jordan Ostroff 35:46
So, do you have to provide some sort of resolution mechanism in between or opportunity to be heard or what happens?
Jared Lee 35:54
No. While the the notice is there to provide that there’s not a legal requirement to provide a resolution mechanism. But common sense would tell you if the if the employee comes back and says hey, there’s a problem with this, this is an accurate, that you would listen and hear them out.
Jordan Ostroff 36:12
So obviously, if you take negative action, well, and not obviously, I have learned from speaking to you that should you take negative action and it’s incorrect, you could potentially have some liability.
Jared Lee 36:26
Jordan Ostroff 36:26
But what happens if you don’t send the letter and you take action? And it is correct? Is that going to protect you? Or do you still need to follow the procedure,
Jared Lee 36:35
The procedure needs to be followed even if the information is correct. So the The procedure is there to protect and provide people the opportunity to be aware that this background check or credit report is influencing their hiring process says, and so the accuracy of the information, does it protect you from liability, this needs to be the procedure you have in place, and really strictly follow.
Jordan Ostroff 37:05
So you can run a background check on somebody and find out that they were convicted for running the largest employment theft ing in the history of America. And you could still be you could still have liability because you didn’t give them the proper notice.
Jared Lee 37:20
You could still have liability. Now, certainly that liability is likely to be a lot higher from a perspective of an individual employees damages. If that information is inaccurate. It does not you know, most consumer protection attorneys are not out there looking to file lawsuits based on situations where information is correct in incorrectly interpreted, right, it doesn’t make for a good case. But at the same time the liability is there.
Jordan Ostroff 37:52
So what we’re talking about is so worst case scenario for a business owner is you don’t don’t send notice you don’t give the person the job. And you do that based upon inaccurate information,
Jared Lee 38:05
Correct that that is definitely the worst case scenario. And I should mention, after you take the adverse action, you’re supposed to send another notice, you’re supposed to say, Hey, now that you we told you this was a possibility, we have actually taken a negative action against you that job is no longer on the table that’s supposed to be done in writing. It can be done in other forms. But certainly writing is the easiest way to do that and show have a record that you’ve complied with the disclosure requirement.
Jordan Ostroff 38:36
So I’m going to ask a dumb question maybe? Why Why?
Jared Lee 38:43
Why do it in writing?
Jordan Ostroff 38:44
know, why do you have to let the person know that you have officially not given them the job based upon whatever you found or whatever reason period,
Jared Lee 38:54
Right? The the post adverse action notice, again, it’s it’s another chance to protect the use of a set of very personal and private information. For the person that’s applying for that job, it gives them the opportunity, and then the another chance to be able to to look at the situation and evaluate, not necessarily for applying to your company again. But it’s a continue to move forward. If there are inaccuracies, if there are things that need to be corrected, it provides them that notice. And these two notices may seem a little bit redundant. It comes from the fact that everyone who uses a credit report, not just employers have to give the post adverse action notice when a negative action is based on a credit report or background check, employers get that added notice of the pre adverse action notice.
Jordan Ostroff 39:47
So so if you’re in a situation where something comes back, that is negative on the background check, but it’s not something that influences your decision, you still need to provide the notices or I mean, I’m assuming that’s best practice. But
Jared Lee 40:05
It’s best practice because it covers you from the the potential of of that being construed as the reason for your decision later. And it’s best to send the notices. Anytime you’re not going to to hire the person that that you did the background check on. However, from a perspective of the liability under the statute, if there is another reason that is an intervening reason, in the background check or credit report truly has nothing to do with your decision. You probably would not have liability.
Jordan Ostroff 40:44
I’d still say best practice, just send.
Jared Lee 40:47
Yes, send the letter.
Jordan Ostroff 40:48
So what I mean, I guess I’m probably the only employer that feels that way. But like if I’m interviewing two candidates for for a job here at Jordan Law, and one of them has gone through the bankruptcy of their business has gone through getting a DUI has gone through a terrible car accident. From my standpoint, it makes you a better employee, because they can provide more empathy for a client. So if I ran to background checks on employees, and it came back where there was something that would normally be negative, but from my standpoint, as a positive do i do i need to send the other person to notice like, Hey, you don’t have a criminal record? So we don’t want you.
Jared Lee 41:22
This is actually the first time I’ve heard that.
Jordan Ostroff 41:25
Hey, that’s what I tried for so well. I also thought of
Jared Lee 41:27
you know, I think when you look at the broad definition of adverse action, if a if a clean background check, is a disfavored factor for your employees, then yeah, I think you probably should send that notice,
Jordan Ostroff 41:43
Or just don’t get a background check.
Jared Lee 41:46
It certainly no, no requirement that employers get a background check, although many of your employment law attorneys will tell you that from a perspective of negligent hiring liability, it’s not a bad practice to engage in, we just want you as a consumer protection attorney, I just want you to engage in that process carefully and follow the right steps.
Jordan Ostroff 42:09
Yeah, I always love the, you know, we’ll have clients, they’ll contact us for hiring or firing issues as they’re happening. And it’s always so much nicer to be able to be like, hey, before you do the next step, please do this. This is a reminder to do that, as opposed to like, Oh, you know, I just turned so and so down because of, you know, x y&z and it’s too late. And now I need to go back and write legal standpoint, offer them the job is the best way for you to remove the liability, which, you know, obviously, you don’t want to do that,
Jared Lee 42:36
Jordan Ostroff 42:38
So even in an at will state like Florida, even in a state that has most of their protection is on the part of the employee or not the employee, we still need to make sure we check all these boxes.
Jared Lee 42:50
Absolutely. This is a federal statute, it overrides any any procedures that are passed by the state of Florida, any any Employment Law issues. It is overarching deals with people in all 50 states. And it needs to be done everywhere.
Jordan Ostroff 43:07
You ever seen a case like this, that involve somebody who was here illegally?
Jared Lee 43:12
I haven’t specifically handled a situation that involves someone that was here illegally, okay, because
Jordan Ostroff 43:19
I’m always interested. You know, unfortunately, we see it mostly from the criminal side, where you have people that don’t feel like they can call the police and then get taken advantage of right, I don’t know, if you would see employers having a similar thing with you know, undocumented workers here or something along those lines, where they know where they think, or they know, they can take advantage of them and not, you know, therefore don’t have to follow all these rules.
Jared Lee 43:40
Certainly, it does put people in a more vulnerable situation, when they’re not in a position to to be able to enforce the laws that are being violated against them. The you know, and that’s the situation where other agencies, private enforcement is not the ideal mechanism to enforce all aspects of this the FTC, and has a lot of enforcement authority, as well as the Florida Attorney General, and the situation. So just because someone is is illegal, you know, may not get you off the hook for for violating in a situation.
Jordan Ostroff 44:19
And look, I don’t know if you guys are finding this interesting, but I am I always go back to, you know, nobody gives me more oh crap moments, are we doing this the right way, then, you know, talking with you about a lot of these things,
Jared Lee 44:28
Well, I’m happy, they try to help you avoid those moments.
Jordan Ostroff 44:31
And that’s true. So anything else we need to talk about when it comes to these, you know, the employment issues here with the background checks?
Jared Lee 44:39
Just I mean, employers should realize background checks are far from infallible about 40% of background checks have a serious error on them. So when someone if you’re going through that hiring process, and someone says, Hey, something’s not right, and what came back, listen to them it is worth your time and effort and and also probably a better fulfillment of the purpose of the Fair Credit Reporting Act, to hear them out and hear the explanation. Because background checks are notoriously inaccurate.
Jordan Ostroff 45:14
And this will also apply to people you know, leasing, or renting houses out, right.
Jared Lee 45:19
So the the process is slightly different, but Tenant Screening generally does fall under the Fair Credit Reporting Act. So if you’re a landlord and using a either a background check a screening service or a credit report in your screening process, be aware that you probably do need consent before pulling that report, and need to give that post adverse action notice notifying the person that that the reason they’re not getting the apartment, or having to pay a higher rate for the apartment, is it’s a credit report that that notice needs to be given to them.
Jordan Ostroff 45:57
I remember the first place that my wife when I lived together before buying our house was a small apartment by the courthouse. And you know, we put down that she worked for the PDS office, I worked for the state and I think the guy offered us the place like within 20 minutes after doing the whole, you know, we’ll need background checks and all that and he’s like, you guys are lawyers, you work for the government. Like if they’re gonna let you, you know, you had that point, I had like level two FBI clearance, he’s like, if they’re okay with it, I’m not gonna find anything.
Jared Lee 46:23
Hey, I think that’s a that’s a good decision on his part, obviously,
Jordan Ostroff 46:27
You know, we paid rent on time, every month, we didn’t destroy the place. That’s true. Um, any other, you know, major things we need to touch on from the consumer protection standpoint, because I mean, I know we can. We can talk about the stuff for another hour, but we are getting to about the 40-45 minute mark.
Jared Lee 46:41
I can probably talk for another month. But now I think I think we’ve hit a lot of good highlights today.
Jordan Ostroff 46:47
Alright, well, if we get any specific questions, we’ll definitely have you back on and go over those. Before we end, can you give everybody your contact info again?
Jared Lee 46:54
Absolutely. Our firms main phone number is 407-477-4401. Feel free to email me directly with any questions Jared@JacksonLeePA. com.
Jordan Ostroff 47:07
Alright, and before we end, you know, I’ll make the same pitch I always do. We are relatively new podcasts. We’re always looking for honest reviews. Hopefully you listen, hopefully you enjoyed us and it would be a five star review. If it’s not email me, Jordan at Jordan, la fl.com. That’s jordanjordanlawfl.com. I’d love to know what we can do to make you enjoy the podcast even more. Alright, we’re here at the end of stretch, run the question we ask everybody, where we end this with all of our guests. And we can edit out any dead time. So take as long as you need to think of your answer. If somebody listens to this podcast, and they take absolutely nothing else from it except for this. What is the one piece of advice that you want to give to every business owner you possibly can? Insert epic drum roll.
Jared Lee 47:58
So be aware of that there are few if any businesses that don’t have laws or regulations that impact them. Don’t be willfully ignorant. Find out what those laws are. And if you need to hire an attorney to help you find those laws and realize that there are ways that your your existence as a business is probably put in in you’re making yourself vulnerable as a business if you willfully ignore the fact that there are laws that impact you.
Jordan Ostroff 48:33
And I appreciate you for giving us a pitch at the end there to you know, research all these issues for potential business owners. But yeah, you know, the the best piece of advice one of the best piece of advice I ever got is the same thing you know, know what you know, and know what you don’t know.
Jared Lee 48:45
Jordan Ostroff 48:46
And that’s sometimes that makes all the difference.
Jared Lee 48:49
Jordan, it’s been a pleasure to be on today.
Jordan Ostroff 48:51
It’s great having you I’ll leave you with I’ll leave you with this Go Gators.
Jared Lee 48:55
You’ve been listening to. Let’s get up to business from Jordan LA. We hope you’ve enjoyed the podcast and would consider sharing the show. We would also love an honest five star review through iTunes, Spotify, Stitcher, or whatever pod catcher you use. If you are interested in being a guest on the podcast, please contact Producer Mark through email at Mark@JordanLawFL.com. Use this subject line podcast guests in your email. Thank you. We look forward to speaking to you again soon.
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