Everything you need to know about the Fair Credit Reporting Act(FCRA), including an overview, legalities, and how it affects background checks.
Fair Credit Reporting Act (FCRA)
The Fair Credit Reporting Act (FCRA) is a federal law that regulates the collection, use, and disclosure of consumer information. The FCRA applies to all consumer reporting agencies (CRAs), including those that conduct background checks for employment purposes.
Background checks MUST be compliant with FCRA laws, otherwise you may open yourself to lawsuits and hefty fines.
But there’s no need to panic, ALL of our employment screening services are 100% FCRA-compliant. Any information you receive from a background check will not only be useful, but legal and non-intrusive, giving you peace of mind that your background check is compliant with local, state, and federal law.
FCRA: Fact vs Fiction
There are a number of common misconceptions about FCRA compliance. The most common misconception is that only employers are required to comply with the FCRA. However, the FCRA also applies to credit reporting agencies, which are the companies that actually conduct the credit report background checks. Another misconception is that the FCRA only applies to criminal background checks. In fact, the FCRA also applies to credit reports, employment history reports, and nearly all types of consumer reports.
The FCRA sets forth a number of requirements that employers and credit reporting agencies must comply with:
- Must obtain the applicant’s written consent before conducting a background check.
- Provide the applicant with a copy of the background report before making a hiring decision.
- Correct any inaccurate information on the background check.
- Not discriminate against applicants based on information on the background report.
Employers and CRAs that violate the FCRA may be subject to civil penalties. In addition, applicants who are subject to a violation of the FCRA may be able to sue the entity conducting the backgroud check for damages.
FCRA Penalties and Fines
FCRA penalties can range from a fine to a lawsuit. In truth, it’s all about how you access or use the information provided in a background check.
Violations can include, but are not limited to, willful violations and negligent violations, which are exactly what the name implies. Willful violations are a knowing dismissal of rules, like using criminal records in a hiring decision and hiding it from the applicant. Negligent violations can include not performing due diligence or misusing information.
With all of our services, we guarantee FCRA compliance, taking the legal worries off your plate. We only provide the information you can legally obtain and use in hiring decisions, so you can rest assured you will be in compliance with all FCRA rules and regulations.
Additional Tips and Information
Here are some additional things to keep in mind about FCRA compliance and background checks:
- The FCRA applies to all employers, regardless of size.
- The FCRA applies to all types of background checks, including criminal background checks, credit checks, and employment history checks.
- Employers must obtain written consent from applicants before conducting a background check.
- Applicants have the right to review their background report and dispute any inaccurate information.
- Employers must not discriminate against applicants based on information on their background report.
FCRA compliance is important for a number of reasons. First, it helps to protect the privacy of consumers. Second, it helps to ensure that background checks are conducted fairly and accurately. Third, it helps to prevent you from discriminating against applicants based on their background.
If you are an employer, it is important to understand the FCRA requirements and to take steps to comply with the law. By doing so, you can help to protect your company from legal liability and ensure that your background checks are conducted fairly and accurately.
By understanding the FCRA requirements and taking steps to comply with the law, you can help to protect your company from legal liability and ensure that your background checks are conducted fairly and accurately.
Discover More Topics
What Is A Good Background Check?
What Is A Good Background Check? Best practices, the basics, legalities, and modifying a background check to your needs. Trust and safety is paramount in the workplace and conducting a
Auditing Your Hiring Process
What Is An Audit? A brief, general audit of your employment screening process can help identify how you can save time and money today. We hear the word ‘audit’ and
Looking at Criminal Records When Hiring
Criminal Records When Hiring What to look for when you see a criminal record during pre-employment screening: How it relates to workplace safety and how you can avoid reducing your
Speak to an Expert Today
Unsure where to begin or just want more information? Fill out the form below and one of our experts will reach out same-day.