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Understand the FCRA
This law was designed to protect consumers in the consumer reporting process.
The Act has been amended twice since being passed into law, and continues to
receive attention from several interested groups. The FCRA was formed to
promote accuracy, fairness and privacy for consumers. Although this law applies
to many industries, Verified only concerns itself with the compliance issues
related to employment.
Comply with the FCRA
This law sets forth strict procedures and guidelines for obtaining
pre-employment background screening reports. In order to not only remain
compliant with the FCRA, but also with state laws, Verified recommends that
your policies, practices and forms related to hiring applicants be reviewed by
licensed professionals before ever procuring reports for employment purposes.
Save this link for future FCRA research:
http://www.ftc.gov/os/statutes/031224fcra.pdf
Four step approach
This overview is not intended as legal advice for your company or staff. You, the
employer, are solely responsible for compliance with the Fair Credit Reporting
Act.
The following steps will help your organization get started ordering and
receiving reports from Verified:
Step 1. Certification
You must certify, in compliance with the FCRA, that your organization will
follow all steps set forth in the Act, which includes responsibility for:
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only using the information for employment purposes
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not using the report in violation of any equal opportunity laws or any other
laws
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obtaining all necessary signed disclosure and authorization forms from the
applicant
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giving appropriate notice (pre-adverse and adverse action letters) in the event
action is being taken against the applicant based in part or in whole from the
contents of the report
Step 2. Present
disclosure
Provide a separate document that consists solely of the written disclosure, with
no additional information, stating that a consumer report may be obtained for
employment purposes. Please consider the following:
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This form cannot be attached to or part of any other form.
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Depending on the nature of the reports ordered, additional disclosures may be
needed.
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It must tell applicants they have the right to request additional information
about the nature of the investigation.
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Some states have specific laws related to the disclosure form that require your
attention; however, they do not apply to the FCRA.
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Verified can supply you with this form.
Step 3. Obtain
authorization from the applicant
Obtain written authorization from the applicant. Please consider the following:
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The content of the written authorization form must identify the services you
are ordering (and we are performing).
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The authorization and disclosure forms can be combined (the one exception to
the aforementioned rule).
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Verified can supply you with this form
Step 4. Adverse
Action
When your organization intends to not hire the applicant based in part or
in whole on the contents of the report, the applicant’s rights, as defined by
the FCRA, must be followed. You must:
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Provide the applicant with a copy of the consumer report.
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Provide the applicant with the FTC document, “A Summary of Your Rights Under
the Fair Credit Reporting Act.” (Verified can help provide this document)
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Provide the applicant a letter with the aforementioned documents that discloses
a toll-free number and the physical address of Verified, Incorporated. Again,
Verified can supply “Pre-Adverse Action Letters.”
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Allow reasonable time (5 to 10 days) to allow the applicant to dispute the
negative information in the report.
If the information is not disputed by the applicant, you must then take one more
step:
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Provide a “Notice of Adverse Action” informing the applicant of your decision
not to hire, along with another copy of the FTC document, “A Summary of Your
Rights Under the Fair Credit Reporting Act.”
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This notice must contain specific statements. Again, Verified can help you with
this process.
Please consult your company’s legal counsel regarding the best practices for
your organization and how comply with the FCRA.
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