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 Complying with the Fair Credit Reporting Act

A.         Certification from Employer.  Prior to supplying a Consumer Report, an employer must certify to the Consumer Reporting Agency that the employer will follow all the steps set forth in the Fair Credit Reporting Act.            

The Fair Credit Reporting Act (FCRA), enforced by the Federal Trade Commission, is designed to promote accuracy and ensure the privacy of the information used in consumer reports.  The FCRA sets out the federal rules and requirements for pre-employment background reports, also known as Consumer Reports.  There are certain conditions for furnishing and using consumer reports for employment purposes.

         1.         That the employer will use the information for employment purposes only.

        2.         That the employer will not use the information in violation of any federal or state equal opportunity law.

        3.         That the employer will obtain all the necessary disclosures and consents as discussed in Paragraph B.

        4.         That the employer will give the appropriate notices in the event that an adverse action is taken against an applicant.

 

 B.         Disclosure to the Consumer.  Before obtaining a consumer report from a Consumer Reporting Agency, the employer must obtain written consent from the employee or applicant and provide them with a clear and conspicuous written disclosure informing them that a background investigation maybe requested from a Consumer Reporting Agency.

 C.         Prior to Taking Adverse Action.  Before taking adverse action against the consumer, the employer must provide two documents to the consumer (1) Copy of the Consumer Report, and (2) The FTC document "A Summary of Your Rights Under the Fair Credit Reporting Act".  The purpose of providing these documents to the consumer before adverse action is taken, is to give the consumer the opportunity to contact the Consumer Reporting Agency to dispute or explain what is in the report.

D.         Notice of Adverse Action.  Once the documents in Paragraph C have been provided to the consumer, and     the employer intends to make the final decision to not hire the consumer, the employer must send the consumer a Notice of Adverse Action, and another copy of "A Summary of Your Rights Under the Fair Credit Reporting Act"