Background Checks for Employees Fail to Comply with Recent Amendments to the FCRA

In a
post earlier this year I discussed the recent amendments to the Fair Credit Reporting
Act (“FCRA”) requiring businesses using background checks on
existing or potential employees to put the individual on notice of
its intention to use the information in making its decision in
hiring or firing employees. In ensuring compliance with the new
regulation, the Federal Trade Commission (“FTC”) went undercover to
investigate the practices used by numerous employers.  After
its investigation of some 45 companies, the FTC placed several
companies on notice that their speedy internet background checks
were not cutting it and are likely in violation of the FCRA. 

The FTC sent warning letters to as many as 10 business notifying
them that the current plans in place for performing background
checks on consumers directly violates the
new amendments to the FCRA.  Specifically, these companies
are using the information obtained in background
checks to hire new employees and failing to provide notice to
the individuals of their intention to review and use the
information.  The law
requires that companies providing information contained in the
background check assure the accuracy of their records and notify
the consumer when a background check has been performed.  When
a business doesn’t take these steps, it must provide notice that
its background checks may include errors and are being used for
marketing or entertainment purposes only.

When putting these companies on notice of their potential
violation of the statute, the FTC states that its primary concerns
is for the consumers whose information is being used that may be
inaccurate or out-of-date.  When companies don’t comply with
the letter of the law, these consumers do not have an opportunity
to protect themselves by reviewing their reports and challenging
any potentially inaccurate information. 

While the FTC is keeping a close watch on companies to assure
compliance, it states that in these 10 cases there was some
indication of non-compliance and warns that failure to change their
current practices may force a more formal investigation resulting
in hefty fines. 

See our other related blogs on background checks and some of the
stories of some unfortunate consumers: Backgound
Checker Violates FCRA, Another
Horrifying Background Check Story, and 
Employment Background Causing Job Loss. 

If during your
search for a new job or during your employment your employer
failed to provide you with notice of their intention to access your
credit report, your rights may have been violated under the
FCRA.  Contact SmithMarco P.C. for a
free case review.