Background Checks According to the Fair Credit Reporting Act

Most companies find themselves neck-deep in multimillion dollars settlements for simply violating procedural requirements of the FCRA. Are you an employer conducting background checks? Then you need to beware of the Fair Credit Reporting Act (FCRA).

What Is the Fair Credit Reporting Act?

When employees conduct background checks through third parties, they use the Federal Credit Reporting Act. The FCRA was enacted in 1971 to protect the interests of consumers through fair and accurate reporting by consumer reporting agencies.

Performing an FCRA Compliant Background Check

Employers doing background checks must disclose their intentions to their employees or applicants. The employees or applicants involved must also give their written consent approving that the employer gets an FCRA report.

The report can be about credit standing, criminal history, or similar information that may determine eligibility for a job.

The FCRA has also set legal steps if an employer considers disqualifying an applicant based on the contents of a consumer report.

1. The consumer agent must disclose a copy of the report to the applicant
2. The agent must also disclose an employee or applicant’s right to dispute any inaccuracies or confusion from the report.
3. Decisions are not to be made until the allotted time for disputing the findings elapses.
4. The applicant is notified again after the allotted time passes. And the decision taken is explained in detail.

What Does the State Law Say About FCRA?

FCRA is a federal law and may be subject to more stipulations under state laws. Employers, therefore, need to navigate compliance reporting with care so as not to violate state laws.

Use a Background Check Provider That Works in Accordance With Fair Credit Reporting Act

To avoid any legal loopholes caused by inaccurate reports, employers should opt for a consumer agent that is diligent and with a reputation to protect. Contact TruDiligence and enjoy reliable screening and investigative services in accordance with FCRA rules.