FCRA

If you plan to evaluate criminal records as part of your pre-employment screening process, you need to be aware of and comply with the FCRA requirements.

What is the FCRA?

The Fair Credit Reporting Act, better known as the FCRA, was first enacted in 1971 to ensure that consumer reporting agencies exercise their grave responsibilities with fairness, impartiality and a respect for the consumer’s right to privacy. In essence, the FCRA protects the subject of a report by putting limits on what consumer reporting agencies can report.

Even though it is named the Fair Credit Reporting Act, the FCRA applies to much more than credit reports. These reports can include the consumer’s credit standing, but can also extend to character, reputation, mode of living, and similar information that can be used to determine a person’s eligibility for credit, insurance, or a job. By these standards, background screening companies are consumer report agencies that the FCRA regulates.

Within the FCRA there are a number of rules about what must and must not be reported. For instance, bankruptcy cases can be no older than ten years and all other adverse information, with the sole exception of criminal convictions, can be no older than seven years. Also, no medical information can be shared unless the report is being used for insurance purposes.

In addition to protecting the consumer once the check is underway, the FCRA also requires an employer to disclose some information and obtain the consumer’s permission before the check can legally begin.

Read more about FCRA disclosure and consent requirements on our next page.

Sources

• Federal Trade Commission. (2008, June 14). The Fair Credit Reporting Act. Retrieved November 6, 2013, from http://www.ftc.gov/os/statutes/fcradoc.pdf