A new guidance titled “What Employment Background Screening
Companies Need to Know About the Fair Credit Reporting Act (FCRA)” has been
released by the Federal Trade Commission (FTC) to better define the responsibility
background screening firms have to clients and consumers in general. Background
reports are described by the FTC as consumer reports under the FCRA as they “serve
as a factor in determining a person’s eligibility for employment, credit,
insurance, housing, or other purposes which include information on a consumer’s
credit worthiness, credit standing, credit capacity, character, general
reputation, personal characteristics, or mode of living.”
The responsibilities of consumer reporting agencies under
federal law are stated as such:
·
Following reasonable procedures to assure
accuracy
·
Getting certifications from clients
·
Providing clients with information about the
FCRA
·
Honoring the rights of applicants and employees
Following reasonable
procedures to assure accuracy
The release of this guidance tells you one thing. Many
consumer reporting agencies are not taking reasonable measures to ensure that
the report is accurate. Ensuring accuracy means a couple of different things.
One, the background screening company needs to make sure that the information
obtained relates to the individual in question. And two, the information
obtained has not been expunged or otherwise sealed.
Essentially, our duty to our clients and consumers alike is
to provide background information that can be directly linked to the applicant/employee
through personal identifiers, and the report consists of strictly convictions
as opposed to arrest records. Individuals should not be punished for an arrest
that did not result in a conviction. That is why our adjudication team verifies
any information found in a national criminal database search at the county
level.
Getting
certifications from your clients
Basically, CRAs need to make sure that their clients have a
permissible purpose to obtain the background report. In this case, permissible
purpose means that the background check is used solely for the determination of
employment. Therefore, background screening companies must get confirmation
from their clients that:
1)
The employer notified the applicant and got the applicant’s
written permission to get a background report
2)
The employer will comply with the FCRA
requirements; and
3)
The employer won’t discriminate against the
applicant or employee, or otherwise misuse the information in violation of
federal or state equal opportunity laws or regulations
It is for this reason that clients are firmly vetted before
the use of our services. Once it is confirmed that the client is a business using
our services solely for employment purposes, they must sign an agreement that
states that they will comply with FCRA requirements, including attaining
consent prior to conducting a background check. Consent forms are stored for
auditing purposes.
Providing your
clients with information about the FCRA
Clients must receive information about their responsibilities
under the FCRA. The document “Notice to Users of Consumer Reports” must be provided
to each client to ensure they know what is required of them under the statute.
One such responsibility of employers is informing every applicant or current
employee of their consumer rights in terms of background screening. This
information, known as “A Summary of Your Rights Under the Fair Credit Reporting
Act”, is to be provided to each applicant/employee undergoing a background
check.
Honoring the rights
of applicants and employees
Because the use of consumer reports can bar individuals from
employment, credit, insurance, or housing, it is important for consumers to
know their rights. These rights are protected under the FCRA due to the major
impact inaccuracies can have on an individual’s ability to obtain employment. The
following is a list of consumer rights under the FCRA:
·
You must be told if information in your file has
been used against you
·
You have the right to know what is in your file
·
You have the right to dispute incomplete or
inaccurate information
·
Consumer reporting agencies must correct or
delete inaccurate, incomplete, or unverifiable information
·
Consumer reporting agencies may not report
outdated negative information
·
Access to your file is limited
·
You must give your consent for reports to be
provided to employers
·
You may seek damages from violators
To read the FTC guidance in full, click here.
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