Questions About the Compliance with the FCRA

What is the FCRA?

The FCRA is the federal Fair Credit Reporting Act, which can be found at 15. U.S.C. § 1681. A copy of the FCRA can be found here.

What are my obligations as an employer or a potential employer under the FCRA? 

Clients who use our background screening services have several obligations under the federal Fair Credit Reporting Act (FCRA), such as:

• Only requesting and using consumer reports (aka background checks) for a permissible purpose.
• Complying with the FCRA, related state laws, and Equal Employment Opportunity laws.
• Providing consumers with proper disclosures and receiving written authorization prior to requesting a report.
• Following the Adverse Action Process prescribed by the FCRA; and
• Keeping consumers' (aka applicants') private information secure and confidential.

For more information, you can view the “Notice to Users of Consumer Reports: Obligation of Users Under the FCRA” published by Consumer Financial Protection Bureau (“CFPB”) here.

Do I have to get consent from a consumer before ordering a consumer report?

Yes. The FCRA requires clients who request reports for employment purposes to receive written consent from the applicant or employee before ordering a report from us. DISA recommends that all clients receive written authorization before requesting consumer reports from us through our online portal.

What is the FCRA's Adverse Action Process?

To summarize this process, you must provide consumers for which you intend to take an adverse action due to the results from one of our reports with a "Pre-Adverse Action" notice. This notice must inform the consumer that you intend to take an adverse action due to the report and must contain GHRR's contact information. This will allow the consumer to contact DISA and dispute any inaccurate information that may be contained in their report before you make your final decision. If you decide to go forward with the adverse action, you must provide the consumer with an additional notice stating that fact. You must wait a reasonable time in between providing these two notices (no less than 5 business days. You can find more information about the Adverse Action Process required by the FCRA here.

Why do I have to wait at least 5 business days before sending the final adverse action notice?

The FCRA requires employers to wait a "reasonable amount of time" after sending the first notice before you may send the final adverse action notice. This is to allow consumers to take advantage of our dispute process. Official guidance suggests that 5 business days is probably a reasonable amount of time, but please be aware that state laws may require you to wait longer.

What disclosures am I required to my make to applicants and employees under the FCRA before I order a report about them?

The FCRA requires employers or prospective employers to provide a disclosure before you request a consumer report and a disclosure before you request an investigative consumer report regarding any applicant or employee. Consumer report disclosures must be provided in a stand-alone document consisting only of the disclosure. Investigative consumer reports must be provided any time you request a service from us that could involve interviews someone the consumer knows or has been acquainted with, such as employment verifications or reference checks. Please consult your legal counsel for more information regarding FCRA-required disclosures.

When do I need to provide applicants with state-required consumer disclosures?

DISA suggests providing all state-required disclosures to the applicant if the applicant either lives in the state or if the applicant has applied to work in the state. However, you should consult with your legal counsel to determine the best way to handle providing any legally-required disclosures.

Where can I find sample disclosure and authorization forms?

You can find examples of these forms here.

What is the "Summary of Rights" and why do I have to provide it to my applicant/employee?

A Summary of Your Rights Under the Fair Credit Reporting Act is a notice published by the FTC and the CFPB. You are required by the FCRA to provide a copy of this form to consumers under several circumstances, such as when you take adverse action. For an updated copy of this form, please click here.