Aldi, Inc.; Analysis to Aid Public Comment

FEDERAL TRADE COMMISSION

[File No. 962-3064]

Aldi, Inc.; Analysis to Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.

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SUMMARY: The consent agreement in this matter settles alleged

violations of federal law prohibiting unfair or deceptive acts or

practices or unfair methods of competition. The attached Analysis to

Aid Public Comment describes both the allegations in the draft

complaint that accompanies the consent agreement and the terms of the

consent order--embodied in the consent agreement--that would settle

these allegations.

DATES: Comments must be received on or before July 21, 1997.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,

Room 159, 6th St. and Pa. Ave., NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:

C. Steven Baker, Federal Trade Commission, Chicago Regional Office, 55

East Monroe St., Suite 1437, Chicago, IL 60603. (312) 353-8156.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal

Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46, and Sec. 2.34 of the

Commission's rules of practice (16 CFR 2.34), notice is hereby given

that the above-captioned consent agreement containing a consent order

to cease and desist, having been filed with and accepted, subject to

final approval, by the Commission, has been placed on the public record

for a period of sixty (60) days. The following Analysis to Aid Public

Comment describes the terms of the consent agreement, and the

allegations in the accompanying complaint. An electronic copy of the

full text of the consent agreement package can be obtained from the

Commission Actions section of the FTC Home Page (for May 13, 1997), on

the World Wide Web, at ``http://www.ftc.gov/os/actions/htm.'' A paper

copy can be obtained from the FTC Public Reference Room, Room H-130,

Sixth Street and Pennsylvania Avenue, NW., Washington, DC 20580, either

in person or by calling (202) 326-3627. Public comment is invited. Such

comments or views will be considered by the Commission and will be

available for inspection and copying at its principal office in

accordance with Sec. 4.9(b)(6)(ii) of the Commission's rules of

practice (16 CFR 4.9(b)(6)(ii)).

Analysis of Proposed Consent Order to Aid Public Comment

The Federal Trade Commission has accepted an agreement, subject to

final approval, to a proposed consent order from respondent Aldi, Inc.

The proposed consent order has been placed on the public record for

sixty (60) days for reception of comments by interested persons.

Comments received during this period will become part of the public

record. After sixty (60) days, the Commission will again review the

agreement and the comments received and will decide whether it should

withdraw from the agreement and take other appropriate action or make

final the agreement's proposed order.

This matter concerns notification requirements under the Fair

Credit Reporting Act, 15 U.S.C. 1681. That statute requires, among

other things, that employment applicants, who are denied employment,

either in whole or in part, because of information in consumer reports

obtained from consumer reporting agencies, be provided with the name

and address of the agency making the consumer report. The failure to

provide the notice required by the statute lessens consumers' access to

information that may have led to the denial of employment. Proper

notice assists consumers in discovering inaccurate or obsolete

information in consumer reports that the consumers can subsequently

dispute and correct. The use of consumer reports to assist in

evaluating employment applications has become increasingly popular in

recent years and, consequently, the significance of this notification

requirement has heightened.

The Commission's complaint alleges that Aldi, Inc., has denied

employment applications based, in whole or in part, on information

contained in consumer reports, failed to advise such job applicants

that the denial was based in whole or in part on information contained

in a consumer report, and failed to supply such applicants with the

name and address of the agency making the report, as required by

section 615(a) of the Fair Credit Reporting Act, 15 U.S.C. 1681m(a).

The complaint also alleges that the failure to advise these job

applicants constitutes a violation of section 615(a) of the Fair Credit

Reporting Act, 15 U.S.C. 1681m(a). The complaint further alleges that,

pursuant to section 621(a) of the Fair Credit Reporting Act, 15 U.S.C.

1681s, a violation of section 5(a)(1) constitutes an unfair or

deceptive act or practice in violation of section 5(a)(1) of the

Federal Trade Commission Act, 15 U.S.C. 45(a)(1).

The proposed consent order contains provisions designed to remedy

the violations charged and to prevent the respondents from engaging in

similar acts and practices in the future.

Part I of the consent agreement requires Aldi, Inc., to cease and

desist from failing to provide the notice

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required by section 615(a) to employment applicants whose applications

are denied in whole or in part because of information in a credit

report. Part I provides that Aldi may not be held liable for the

failure to provide such notices if it demonstrates by a preponderance

of evidence that it had instituted reasonable procedures to comply with

section 615(a).

Part I also requires Aldi to provide the notice required by section

615(a) to all employment applicants, at their last known addresses, who

were denied employment because of information in a credit report

between January 1, 1994, and the date that the Order is issued, within

90 days after service of the order.

Paragraph II requires Aldi to maintain documents demonstrating its

615(a) compliance for a period of five years from the issuance date of

the order and to make the documents available upon request to the FTC

for inspection and copying. Paragraph III requires Aldi to deliver

copies of the Order, at least once per year for a period of five years

from the date of issuance, to all persons responsible for its

compliance. Paragraph IV requires Aldi to notify the Commission within

30 days of changes in corporate structure for the duration of the

order. Paragraph V provides for the filing of a compliance report with

the Commission within 60 days of the issuance date of the order.

Finally, Paragraph VI contains a sunset provision, which terminates the

order 20 years after issuance.

The purpose of this analysis is to facilitate public comment on the

proposed consent order. It is not intended to constitute an official

interpretation of the agreement and proposed order or to modify in any

way their terms.

Donald S. Clark,

Secretary.

[FR Doc. 97-13149 Filed 5-19-97; 8:45 am]

BILLING CODE 6750-01-M