Know Your Rights

Employment Background Checks and The FCRA (1)

For working consumers across the country, understanding that the Fair Credit Reporting Act ("FCRA") can protect you during a job interview or throughout your employment, may help you get the job you need or keep you in the job you already have.  The FCRA, a consumer minded statute, enacted in the 1970s, provides protection for your credit reporting history can protect you during an employment background check.  
During an interview or a job review, as an applicant or employee, knowing your rights under the FCRA will protect you in a situation where criminal information that is out there that may or may not be true may cost you a job or a promotion.  Consumers whose rights have been violated under the law are entitled to recover actual damages.  Statutory damages of up to $1000 can be recovered for willful violations of the law.  Under the FCRA, attorney's fees are awarded to the prevailing consumer.  The key to understanding compliance is as easy as learning four basic steps.
Step 1:  Permissible Purpose
An employer must have a permissible purpose to access your credit or other background file.  For example, a permissible purpose for an employer to access your credit file is when you apply for employment with a company or when you are up for a review or promotion.
Step 2:  Background Disclosure and Authorization
The employer must present you with a Disclosure and Authorization form for you to sign in order to permissibly access your files.  In order for an employer to access your credit file or a background report, he or she must present you with a form that advises and discloses to you that your background report is being accessed.  That form must "stand alone."  That is, the form must just be the disclosure and cannot contain any other disclosures or warnings or any statement that you are waiving any rights you may have if the information they obtain results in a denial of the employment.
Step 3:  Pre-Adverse Action Notice
In the event employment is denied, the employer must follow Step 3 and send a Pre-Adverse Action letter.  This means that before the employer denies you employment, you are to get a warning that they received information about you that may cause you a denial.  This letter must include a complete copy of the credit report used by the employer in the background check and a copy of the Summary of Rights Under the FCRA.  This allows the consumer time to rectify the report if it is inaccurate.
Step 4:  Adverse Action Notice             
Subsequent to the Pre-Adverse Action notice, the employer must send an Adverse Action letter to the employee.  This notice must be sent after the employer makes its final determination, and must include the reason behind the decision to deny employment.  Included with this letter, the employer must supply the name of the company that provided the background check report and must provide you a Summary of Rights under the FCRA. 
These four steps are aimed at protecting consumers from errors in their credit reports.  If you feel your rights have been violated during an employment background check and you would like to discuss your situation in greater detail, contact SmithMarco P.C. for a completely free case review.


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