What are FCRA Background Checks

When it comes to conducting background checks for employment purposes, the Fair Credit Reporting Act (FCRA) applies to protect consumers.  But that is not the case in every instance.  The FCRA does not cover all background checks.  It covers most.

When Does the FCRA Apply?

A consumer report is one that bears upon a persons credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living is sold to a potential employer.  A consumer report is more than just about credit.  It is about reputation and character as well.  Companies aside from regular credit bureaus do amass and sell this sort of data about people.  Even though its not about credit, the Fair Credit Reporting Act applies. If an employer purchases a report about a person from a company that sells reports that has information about the above matters, the report is considered a consumer report and the FCRA will apply.

If the FCRA applies, the employer has certain obligations to the employee (or potential employee) if that report factors into the decision of whether to hire or promote.  It must provide a copy of the report and notification of the person’s rights to dispute inaccurate information.

When Won’t the FCRA Apply?

There are a few situations where the FCRA does not protect consumer’s from a background check.  Looking at the description of what a consumer report is, some information obtained by employers does not meet the criteria.  If an employer simply did its own search of a courthouse records and found a judgment, that information would not be a consumer report.  The employer did not go hire someone to prepare a report, it just did a search of public records.  Also, some industries will go directly to law enforcement to obtain records.  Law enforcement (the police or FBI) do not prepare and sell reports about people.  They just have the arrest records.  If those are accessed, that would not be covered by the FCRA.

Thus, not all background checks are FCRA background checks.  Sometimes, a report is not sought or obtained.  However, if a report is sought an obtained, and it contains inaccurate information, you have rights.  Contact SmithMarco, P.C. for a completely free consultation.

 

Larry Smith
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