Compliance and Regulation Updates

FCRA Compliance

If you are using information we provide for “employment purposes” (which includes individual contractors and agents that are not traditional employees), you must follow the FCRA requirements listed below.

Before using our services

It is important to educate yourself. One important and well-written document to read is the Consumer Financial Protection Bureau "Notice to Users of Consumer Reports".

Before the check

The background screening process is relatively simple for the applicant. First, you must give the applicant a disclosure form that informs him that you will obtain a consumer report for employment purposes. This disclosure must be separate from anything else, especially your employment application or any release of liability.

Second, the applicant must sign an authorization that permits you to obtain a consumer report for employment purposes.

The disclosure can only either be on a standalone form or combined with the authorization form. But if you combine them, then the combined form must not contain anything other than disclosure and authorization. A good test for this is whether each sentence could begin with either "We hereby disclose to you that ..." or "You hereby authorize us to ...".

The primary purpose these forms serve is to comply with the FCRA. These forms also give the background screening company permission to do the check and may serve as verification to former employers or schools that they are allowed to give information.

To give you an idea of the importance, you can read the 2017
Ruling from the Ninth Circuit Ruled that Disclosures Containing Waivers Violated the FCRA
and that a prospective employer’s violation of the FCRA is ‘willful’ when the employer includes terms in addition to the disclosure, such as the liability waiver here, before procuring a consumer report or causing one to be procured.

Where we obtain information for you based on an interview (for example, reference checks), you must also disclose to the subject that (1) you are obtaining an investigative consumer report, including information about character, general reputation, personal characteristics, or mode of living, (whichever is applicable), and (2) that he or she may obtain a description of the nature and scope of our investigation. If the subject requests that description, you must provide it within five days. Even though this is in the nature of the disclosure, you may want to put this information in your authorization, to protect the "repeateness" of your disclosure.

Before the decision

The FCRA you to provide a “pre-adverse-action notice” a reasonable time before making a decision based (even in part) on the report. This notice must include a copy of the report and the Consumer Financial Protection Bureau’s summary of rights. In effect, this requires the user to send the notice, and then wait a reasonable amount of time. The Federal Trade Commission has said that five business days is a reasonable amount of time when the notice is delivered by first class mail, so the normal practice is to wait at least five business days. Once that reasonable period of time has elapsed, you may make a decision based on the report, but only if the subject of the report has not disputed it. If the subject of the report has disputed it, you must wait until we resolve the dispute before taking action.

On the decision

If you make an adverse decision based on our report, you must:

    • Notify the subject of the decision
    • Notify the subject of our company name, address and telephone number
    • Notify the subject that we did not make the decision
    • Notify the subject that they can get another free copy of the report during the next 62 days
    • Notify the subject that they can dispute any inaccurate or incomplete information in the report with us
    • In addition, many states (especially California) have additional requirements concerning your use of our services.

backgroundchecks.com provides forms online and assists you with compliance

      Our customers have access to a dedicated compliance area in our web based order system. Amongst others the following compliance support is available there:

backgroundchecks.com can help with electronic pre-adverse and adverse action services

      If you want us to handle this process, you will only have to provide the email address for the applicant during the order process. The video will give you a quick overview of the process.

Be sure. Be confident. Be fast, efficient, and consistent.

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