Clarifacts

FCRA Non-Compliance

FCRA Non-Compliance Cost Employer $5.9 Million

According to a recent cincinnati.com article, First Group America (FGA) has settled a class-action lawsuit totaling $5.9 million for failure to comply with the federal Fair Credit Reporting Act (FCRA). Specifically, the suit cited FGA for obtaining criminal background checks without a signed authorization from the employee and/or applicant, as well as failing to conduct proper adverse action notification steps when denying employment.

At a time when state and federal regulations are changing rapidly and are under ever-increasing scrutiny, working with a knowledgeable background screening provider and legal counsel well-versed in employment law is more important than ever. Now is a good time to evaluate your screening policies, procedures and practices and ensure they are current. Here are a few questions to consider.

Do you have disclosure and release authorizations with the required federal (and state) language?

The FCRA stipulates that 1) a clear and conspicuous disclosure be made in writing before requesting a report and that the document consists solely of the disclosure (a paragraph at the end of an employment application form is not acceptable) and; 2) the applicant has given authorization in writing.

Are you sending pre-adverse action notifications along with these required documents?

The FCRA also requires that before taking any adverse action (i.e. denying employment) based in whole or in part on the report, you must provide the applicant with a copy of the report and the FCRA Summary of Rights.

Do you follow up with a proper adverse action notification?

Additionally, after an “appropriate” amount of time, you must provide an adverse action notification stating your decision, specific language and information related to the consumer reporting agency (background screening company) and their right to a free copy of the report and ability to dispute, with the consumer reporting agency, the accuracy or completeness of any information in the report.

If you have any questions or are ready to partner with a background screening company with a sharp focus on compliance and client support, call Clarifacts at 1.800.318.0553.

©2011 Clarifacts

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