Navigating the vast world of FCRA compliance can be overwhelming and confusing at times to say the least, not to mention the high stakes of noncompliance. Failing to abide by FCRA regulations puts your organization at risk for a potentially expensive and reputation-damaging lawsuit. For example, the federal fine for willful non-compliance are actual damages or statutory damages can be up to $1,000 per violation. But don’t worry! True Hire has compiled the information below to get you started on your way to understanding FCRA compliance. DISCLAIMER: This blog is being provided for general information purposes only and should not be construed as legal advice. For legal advice, please contact an attorney directly.

What does FCRA stand for?

The Fair Credit Reporting Act (FCRA) is U.S. Federal Government legislation enacted to promote the accuracy, fairness, and privacy of consumer information contained in the files of consumer reporting agencies (CRAs), such as True Hire. It was intended to protect consumers from the willful and/or negligent inclusion of inaccurate information in their credit reports.

What does it mean to be FCRA compliant when it comes to background checks?

The FCRA regulates the collection, dissemination, and use of consumer information, including consumer credit information. Background checks are included under the FCRA. Businesses must abide by the FCRA regulations regarding background checks in order for their screening process to be compliant.

How do I stay FCRA compliant?

The Equal Employment Opportunity Commission (EEOC) and the Federal Trade Commission (FTC) teamed up to create this comprehensive article and resources list to help employers understand the nitty-gritty of the FCRA when it comes to hiring. Because all the information in the FCRA is important, we recommend you read the entire joint article, as well as the actual FCRA law.

What is adverse action?

Adverse action is not hiring an applicant or firing an employee based on background information obtained through a company in the business of compiling background information, like True Hire for example.

Do the same background laws apply to volunteers, nannies/babysitters, and contractors?

Yes. According to a 2011 report released by the FTC entitled 40 Years of Experience with the Fair Credit Reporting Act: An FTC Staff Report with Summary of Interpretations, background checks conducted on volunteers, nannies/babysitters, and contractors are considered for “employment purposes”. See page 32 of the report.

Do states have their own consumer reporting laws?

Yes, some states have their own consumer reporting laws in addition to the federal laws. Click here for an overview of each state’s regulations.

How does True Hire help companies maintain FCRA compliance with their background check process?

True Hire ensures FCRA compliance in all 50 states to provide our customers the highest level of protection. We have tailored disclosure forms that comply with specific state and federal laws. We also have an FCRA Compliance Program that covers adverse action, updates on federal & state laws and regulations, and other tools to ensure clients are making informed decisions about prospective employees, volunteers and tenants. See below for more information on the specific ways True Hire helps businesses be FCRA compliant when it comes to background screening.

How True Hire Can Help your Company Maintain FCRA Compliance

True Hire works diligently to help you navigate the ever-changing regulatory landscape of the background screening industry. Here’s what our commitment to compliance means for your organization:

• Access to more than 100 years worth of industry expertise when it comes to compliant background screening.
• Fully-vetted background authorization and disclosure packets tailored to comply with state and federal law.
• Industry-leading tools for managing your adverse action letters.
• Robust technology capabilities for color-coding results to fit your criteria matrix.
• Full compliance reviews of your current processes and documentation.
• Updates on major changes to regulations at the federal, state, and local level.
• Customized screening services to keep you compliant with industry-specific regulations (DOT, healthcare, etc.)

Have Questions? Helpful links below, but be sure to contact your legal counsel.

Sources

40 Years of Experience with the Fair Credit Reporting Act: An FTC Staff Report with Summary of Interpretations. Federal Trade Commission.

Background Checks: What Employers Need to Know. Equal Employment Opportunity Commission and the Federal Trade Commission.