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.