The Fair Credit Reporting Act (FCRA) was passed in order to ensure that Consumer Reporting Agencies (CRAs) provide correct and complete information to organizations that wish to evaluate your credit or check your background for employment purposes. With that in mind, it’s important to understand the following:
- No every background screening company is a CRA
- Only CRAs can issue consumer reports, including background checks
- CRA-generated consumer reports are subject to the highest standards of integrity and thoroughness and must comply with stringent legal requirements
If you see disclaimers on background check websites such as, “Not for employee screening purposes,” or “for personal, informational use only,” these are clear indications that the screening company in question is not a CRA and that their reports do not comply with FCRA laws and regulations.
To ensure that you get legally compliant, accurate background screening reports, always choose a CRA.
One significant legal requirement of pre-employment background checks relates to disclosure requirements. Disclosures include the following:
- Notification and authorization that the background check is being conducted. This must be provided before the check is done and as a separate document. This notification cannot be part of any other packet or included on the application
- Pre-adverse action notice. In the event that the background check reveals information that disqualifies the candidate for employment, the candidate must be notified and given at least five business days to correct the report or provide explanations.
- Adverse action notice. Once the requisite period has passed, if the employer still wishes to deny employment, the applicant must be given an adverse action notice.
The reason these disclosures are a matter of law is that consumer reports like background checks rely on imperfect public records. Mistakes happen frequently and consumers need the opportunity to correct them. Common names cause confusion. Court documents are prepared by imperfect humans. To make matters more imprecise, court records rarely include social security numbers, so names and birth dates and maybe a driver’s license number are often the only identifiers, making it easy to assign a criminal case to the wrong “John Smith.” Professional CRAs have the skills and resources to clear up many of these issues before reports are even generated. But, in the event that errors slip through, and they frequently do, legally required disclosures provide candidates the chance to make corrections before employment decisions are made.
CRA Background Screening
Pre-employment background screenings are an important tool for reducing the risks associated with hiring dishonest individuals. CRA background screenings reduce the risk of relying on inaccurate information to make hiring decisions. Don’t skip the background check and always trust a CRA to do the job.