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Four Essential Requirements to Comply with the FCRA when Conducting an Employee Background Check

On Behalf of | Oct 7, 2013 | Consumer Protection

Since the Fair Credit Reporting Act (“FCRA”) amended the
requirements of
conducting employment background checks
in early 2013,
compliance has never been more important.  Consumers need to
be cautious that their potential or existing employers are not
violating their rights under the statute and knowing their rights
is the first step to protection.

  • Employers must submit written consent from the employee
    prior to requesting a copy of the employee’s credit
    file.  As of January 2013, the FCRA requires that
    anytime an employer requests a copy of an employee’s credit file
    for the purpose of a background check, the employer must provide
    proof of consent from the employee.  Such authorization
    must clearly show that the employee understands the information
    requested will be used for the purpose of making employment
  • Employers must disclose their intention to conduct a
    background check.
    The employee must be aware of the employer’s intention to conduct
    a background check and the disclosure must include a statement
    regarding the type of background check to be conducted, what
    information will be gathered during the process and how the
    information will be utilized.  This document must be identical
    to the document presented to the credit reporting agency when
    requesting the employee’s information.
  • Employers must follow protocol prior to taking adverse
    action against an employee.
    Should the employer receive information contained in the report
    requiring them to take adverse
    against the employee, prior to taking this action, the
    employee must be presented with a copy of the information received
    from the
    credit reporting agency along with a copy of “Summary of Your
    Rights Under the FCRA”.
  • Employers must follow protocol when taking adverse
    action against an employee
    If an employer takes adverse action against an employee, the
    employer must provide an “Adverse Action Letter”.  This letter
    must include the name, address and telephone number of the credit
    reporting agency who provided the report; a statement declaring the
    credit reporting agency is not responsible for the adverse action
    taken against the employee and that it is not able to provide a
    reason for the adverse action; a statement that the employee has
    the right to obtain a copy of the same credit report by making a
    request within 60 days of the adverse action; and a statement that
    the employee has the right dispute any inaccurate information
    contained in the report directly with the credit reporting.

If you feel an employer has violated your rights under the FCRA,
contact SmithMarco P.C. for a free
case review