What are my obligations as an employer under the Federal Fair Credit Reporting Act (FCRA)?

Users of the information for credit, insurance, or employment purposes (including background checks) have the following responsibilities under the FCRA: (This is not a complete list. For a complete list, refer to the Fair Credit Reporting Act at: https://www.ftc.gov/enforcement/rules/rulemaking-regulatory-reform-proceedings/fair-credit-reporting-act

  • Obtain an applicants’ consent via a signed release, prior to conducting a background screening or credit check.
  • Users must notify the consunmer when an adverse action is taken on the basis of such reports.
  • Users must identify the company that provided the report, so that the accuracy and completeness of the report may be verified or contested by the consumer.
  • Obtain a signed release from the applicant prior to conducting any type of background investigation.
  • Keep an applicant summary of rights on file along with individual applicant reports for a minimum of five years.
  • If considering adverse action, provide the applicant with a pre-adverse action (copy of the report and applicable summary of rights) prior to taking any adverse action.