FCRA Background Check: What Is It?

First of all, we need to answer what FCRA stands for. These initials refer to the Fair Credit Reporting Act, which is a key federal law that regulates employment background checks and the processes associated with this. It really doesn’t matter if a credit report is involved; it applies to third-party checks and it’s designed to ensure applicants are treated fairly. It also offers protection to all agencies that are in federal compliance with the act.

The FCRA came about to promote fairness, reporting accuracy, and privacy of consumer information. Sensitive information contained within the files, documents, and databases of consumer reporting agencies and other entities is vulnerable to abuse. The FCRA attempts to prevent any type of abuse of this private information, in the process protecting consumers against willful inaccurate reporting. In turn, it offers a level of protection to employers and third-party agencies against frivolous lawsuits.

Compliance is key. In order to afford these protections to all the parties involved, a specific process must be followed, and everyone involved needs to be in compliance with the stipulations of this federal act.

In short, the FCRA regulates the collection, distribution, and usage of consumer information. It’s been around since 1970, and it regulates three key groups: consumer reporting agencies, the users of these consumer reports, and the providers of consumer information.

Now that you know a little more about what the FCRA is and how it offers protection, you may be asking yourself: What does all this have to do with employment background checks?

The answer is, “Plenty!” An FCRA-compliant background check is essential for fairness all the way around. When any organization makes use of background screening services during its hiring process, it’s essential that the information that’s being reported is accurate and that the FCRA-compliant processes are followed. It’s equally important that all FCRA standards are upheld.

Why It Matters to Employers

If you’re an employer, why should you care? For the following reasons, FCRA background checks matter to businesses that are hiring:

  • If the background check you perform, or the background screening services you receive, fail to be FCRA compliant, these violations can lead to costly lawsuits against your company.
  • By being compliant, and working with third parties who deliver fully FCRA-compliant background checks, you keep candidates informed every step of the way, protecting you from any disgruntled candidates taking legal action against you.
  • You enjoy peace of mind knowing that as an employer, you are complying with the proper collection, storage, and removal of personal data related to any (and all) of your prospective job candidates.

Why It Matters to Applicants

As an applicant for a job position, FCRA-compliant background checks are important to you because:

  • You have rights! You have the right to be informed and to provide your consent whenever an employment background check is done on you.
  • You are allowed to review any information that’s compiled on you; this gives you the chance to fix any errors that may be present.
  • If you feel that decisions were made unfairly based on reports gathered about your personal data, you have the right to appeal those decisions.

As you can see, as a job candidate, it’s in your best interest to know whether or not background screening done on you complies with the FCRA.

How NationSearch Can Help

Background check companies are not immune to compliance. In fact, they’re required to comply with the FCRA! However, you need to check with a background screening company before using its services to ensure that it is, indeed, FCRA-compliant in its processes and actions.

NationSearch has been serving clients in many different industries since 1987 through outstanding pre-employment screening services. Rest assured, we are in full FCRA compliance. Reach out to us for all your background screening needs.