Monetary Auth of Singapore Why are companies demanding employees' credit reports?
Recently, many employers, especially in the financial sector, have been demanding that their employees and representatives submit their credit reports yearly to them.

This is being explained as mandatory under the Securities and Futures Act, as anyone with a bad record is supposed to be "financially distressed" and is thus not a fit and proper person under the Act.

They are also perceived to be vulnerable to financial crimes and flagged as a financial risk.

It is understandable if a financial institution requires your credit report when you apply for a credit card, credit line or loan.

However, it is the financial institution that initiates the credit check and pays for the report.

In the employment situation, the employer mandates that the employee must apply for and submit the report to his employer personally, and, in some cases, has to pay for the report.

Why is it necessary for employers to demand that their employees submit credit reports to them?

It also seems that in one particular financial institution, an employee cannot have outstanding unsecured loans of more than six times his average monthly income, or he will need to explain his situation and be subjected to three-month reviews.

One's credit standing and financial situation should be private and not be subjected to an employer's prying eyes.

The relationship between a financial institution and an employee is only a contract of employment, not a fiduciary one.

It may even be against the Personal Data Protection Act for an employer to demand his employee's credit report.

Can the Monetary Authority of Singapore comment on this situation?

Vincent Khoo

Source: https://www.straitstimes.com/forum/letters-in-print/why-are-companies-demanding-employees-credit-reports

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