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Overview of the FCRA background check


Whether you are new or seasoned in the HR department, you’ve certainly come across the term FCRA and FRCA Background check.

FCRA: What does this four-letter acronym mean?

FCRA = Fair Credit Reporting Act.

The Act came about over 50 years ago and still leaves many people confused. The intentions are to protect everyday consumers in files that are kept by credit reporting agencies. It promotes the accuracy, fairness, and privacy of consumer information.

Who needs to comply?
Everyone who is involved with an FCRA background check.

Most people support the Act’s spirit, but there are continuous debates on how one complies with the Act. Add the growth of hyper-technical lawsuits to the mix. Most people find themselves dazed and confused as they try to navigate the ever-changing landscape.

How do you comply?
We will go through a high-level review of the Act and the requirements as of this writing. A link to the full text of the Act is available at the end of this article.

Below you will find references to consumer, user, and consumer reporting agencies (CRAs). A consumer is your candidate or applicant, and the user is the Employer or its’ designee.

Section 604 (b)
• User certifies compliance with the FCRA requirements
• In accordance with the written instructions of the consumer to whom it relates.
• It has a Permissible Purpose.

Section 604 (b) (2)
• User has disclosed to the applicant that it may obtain a background check
• This disclosure needs to be clear and conspicuous
• User has received authorization from the consumer (candidate) in writing to perform a background check

Section 605
• Consumer Reporting Agencies must follow limitations on reporting provided in the FCRA and Federal & State Laws

Section 607 (b)
• Consumer Reporting Agencies shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.

Section 604(b)(3)
With limited exception, ‘when using a consumer for employment purposes, before taking any adverse action based in whole or in part on the report, the person intending to take such adverse action shall provide to the consumer to whom the report relates.’
• A copy of the report
• A summary of rights

Section 611
• The consumer (candidate) may dispute the report if it is incomplete or inaccurate

Section 611(a)
• The Consumer Reporting Agencies must reinvestigate if there is a dispute
• ‘if the completeness or accuracy of any item of information contained in a consumer’s file at a consumer reporting agency is disputed by the consumer and the consumer notifies the agency directly, or indirectly through a reseller, of such dispute, the agency shall, free of charge, conduct a reasonable reinvestigation to determine whether the disputed information is inaccurate and record the current status of the disputed information.’

Section 604 (b)(2)
• The user makes the final decision.

How can you apply these changes?

The overview provided above is a lot of information to absorb and can be even more technical to apply. Check out our article, 178 million reasons you should care about the FCRA, for practical tips on how to follow the FCRA guidelines. Always start by reviewing your internal processes and forms to identify potential gaps. You should also make sure you are confident with your screening partner’s FCRA compliance.

Have a conversation with your screening provider to ensure HR confidence in FRCA background checks and let them help you.

Share pertinent information with them so they can help you out. Things that could guarantee a productive conversation with your provider include the States you operate in, the types of positions you have, your recruiting process, and others.

With this information in hand, your screening provider is more equipped to provide suggestions for improvement to your application and background check process.

This information is provided as a courtesy, may change, and is not intended as legal guidance. 



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