With 90% of employers conducting background checks, it’s imperative to understand the FCRA Rules and Regulations. CRA’s, as well as employers, must understand these rules to avoid becoming part of the $174+ million paid out in Class Action Lawsuits. Under Legal Resources on the bottom of the home page of the website is the latest FCRA for your reference if needed.
Another lawsuit for an FCRA violation. 7-Eleven reaches a settlement of nearly $2 million for not using a stand-alone notice when conducting background checks on applicants. I can’t stress the importance of separate Disclosure & Authorization forms when submitting a background check. Lawsuits like this pertain to tenant screenings as separate forms should be used as well.
The FTC rescinds FCRA model forms and disclosures that are no longer necessary after the issuance of the Dodd-Frank Act.
Many employers perform background checks to screen individuals they are considering hiring. Online background check websites claim that employers can perform background searches quickly and cheaply without having to hire a legitimate background check company. However, federal and state laws impose complex requirements on employers who perform background checks on prospective hires. Legal settlements for failing to comply with these requirements can easily reach millions of dollars.
For instance, the federal Fair Credit Reporting Act (FCRA) requires employers to properly notify candidates that they will be performing credit checks and to obtain proper advance authorization. The FCRA’s requirements are highly technical and it is easy to make mistakes, so FCRA violations are a subject of frequent and increasing class action litigation. According to WebRecon LLC, hundreds of lawsuits are filed under the FCRA every month and have increased every year for nearly two decades. Employers who perform quick credit searches online may be unwittingly violating the FCRA, exposing themselves to possible lawsuits. A legitimate background search agency, however, will have the expertise to help employers meet the FCRA’s vigorous notification and authorization requirements.
Similarly, several states, the District of Columbia and many cities have enacted “Ban the Box Laws” prohibiting employers from seeking criminal history information about job candidates in certain ways. Many of these laws not only ban job applications requiring that candidates check a box if they have a criminal record, but also prohibit employers from seeking any criminal history information too early in the application process. Employers who perform their own online criminal background checks on job candidates, without seeking guidance from background check experts, risk violating the law. A legitimate background search company, however, can help employers navigate the complex tapestry of federal and state laws that apply to criminal background checks.
Adverse actions are a very important step in the hiring process, or should I say: The not hiring process. It can cost a company millions.
You can read the entire article in the link below.
The National Association of Professional Background Screeners (NAPBS) has made an attempt to bring order to the Wild West of background screening companies. According to its materials, the NAPBS has established an accreditation program, the Background Screening Agency Accreditation Program (BSAAP), to advance “professionalism in the employment screening industry through the promotion of best practices, awareness of legal compliance, and development of standards that protect consumers.”
Background screening companies that voluntarily participate in the BSAAP agree to follow the NAPBS’s Standards and to submit to an auditing process. If all background screening companies followed the NAPSB Standards, many elements of which simply require compliance with the FCRA, there would be many fewer errors on criminal background reports.
Notable elements of the NAPSB Standards
- The [consumer reporting agency] CRA shall have procedures in place for handling and documenting a consumer dispute that comply with the federal FCRA.
- When reporting potentially adverse criminal record information derived from a non-government owned or non-government sponsored/supported database pursuant to the federal FCRA, the CRA shall either: A) verify the information directly with the venue that maintains the official record for that jurisdiction prior to reporting the adverse information to the client; or B) send notice to the consumer at the time information is reported.
- The CRA shall designate an individual(s) or position(s) within the organization responsible for compliance with all state consumer reporting laws that pertain to the consumer reports provided by the CRA for employment purposes.
- The CRA shall have procedures in place to inform clients that they have legal responsibilities when using consumer reports for employment purposes. The CRA shall recommend that clients consult their legal counsel regarding their specific legal responsibilities.
- The CRA shall follow reasonable procedures to assure maximum possible accuracy when determining the identity of a consumer who is the subject of a record prior to reporting the information. The CRA shall have procedures in place to notify client of any adverse information that is reported based on a name match only.
- The CRA shall designate a qualified individual(s) or position(s) within the organization responsible for understanding court terminology, as well as understanding the various jurisdictional court differences if the CRA reports court records.
- Should the CRA receive information from the verification source subsequent to the delivery of the consumer report, and as a direct result of the initial inquiry, that conflicts with originally reported information, and that new information is received within 120 days of the initial report (or as may be required by law), the CRA shall have procedures in place to notify the client of such information.
We wholeheartedly endorse the NAPBS efforts to promote best practices in our industry… and take it a step further. Each and every report we run is checked for compliance before delivery to you. This helps to ensure that you have the right information on which to base hiring, tenancy and other decisions.