A large retailer reached a settlement for $3 million dollars over
allegations that it violated the Fair Credit Reporting Act (FCRA). The
allegation stated that the large retailer failed to notify over 64,500
applicants and give them due process to dispute the accuracy of the
information contained in the Consumer Report.
The FCRA clearly
states that you must notify an applicant if a "Consumer Report" contains
derogatory information about the applicant and give them time to
dispute or correct the information prior to making a final determination
on their employment. It further states that you must give the
applicant the contact information of the Credit Reporting Agency (CRA).
This process is defined as pre-adverse action.
It is alleged
that the large retailer bypassed this step in the process and simply
notified the applicants of the adverse action or their potential denial
of employment.
As a reminder to employers, you are obligated to follow the Fair Credit Reporting Act (FCRA) as well as state laws.
The obligation for the employer under the FCRA:
1) Provide the applicant with a separate "Disclosure and Consent" form.
2) Ensure that your consent covers any additional State Laws if they applicant is located in that state.
3) Give the applicant access to the "Summary of Rights" that was updated as of January 1, 2013.
4)
If their "Consumer Report" contains derogatory information that will
affect their employment, notify the applicant with pre-adverse action
and let them know what Credit Reporting Agency to contact to clear up
any information that is inaccurate.
5) If the information is
accurate and you determine that the applicant is not suited for a
specific job, then notify the applicant of adverse action and again give
the applicant the name of the CRA and another copy of the "Summary of
Rights."
For more information regarding the employers responsibility, please refer to the Fair Credit Reporting Act.
