While Honesta Screening handles most of the heavy lifting when it comes to federal regulations, it's important to understand what this law entails fully. Below you'll see a quick rundown of what you need to know.
What is the FCRA?
The Fair Credit Reporting Act dictates how Credit Report Agencies handle consumer’s personal information. Its mission is to promote fairness, accuracy, and the privacy of consumer credit information.
The Act specifies separate responsibilities for consumer reporting agencies (CRAs) and users of consumer reports.
*Background check/employee screening reports, like those produced by Honesta Screening, are considered consumer reports.
The Federal Trade Commission has made some provisions in recent years that you should be aware of to keep your business compliant with consumer laws and regulations. It’s good to note that many states have their own laws when it comes to consumer reports.
Four Steps to FCRA Compliance
1. End-User Certification
Honesta Screening will provide you with an End-User Agreement that certifies our organization’s compliance with the FCRA regulations. This signed agreement ensures that the End-User (your company) understands and will adhere to the FCRA’s guidelines and obligations.
2. Consent and Disclosure
The disclosure must be separate from the application itself. The consent and disclosure document can be one document. When asking the applicant to list alternate names previously used- to avoid discrimination and privacy issues- use “previous names” instead of “maiden name.” The consent and disclosure documents are kept separate from the general employee file because of D.O.B. information.
3. Pre-Adverse Action Notice
If the employer intends to disqualify the applicant based on the background check, in whole or in part, the FCRA requires the employer to immediately send the applicant a notice of potential adverse action (pre-adverse action notice) along with a copy of the report and the FCRA summary of rights. The pre-adverse action letter gives the applicant the opportunity to contact Honesta Screening to correct any errors in the report.
4. Adverse Action Notice
If the employer has decided to disqualify the applicant based on the background check, in whole or in part, the FCRA requires the employer to send the applicant a follow-up to the pre-adverse action notice called the “Adverse Action Notice.” This notice needs to be sent with a copy of the FCRA summary of rights.
* The adverse action letter denies employment based on the contents of the background check.
Why the Two-Step Process?
A multi-step process gives the applicant time to dispute any errors in the report. If the applicant does not contest the findings or cannot present information to overturn the findings in the report, the FTC declares 5 days after the pre-adverse letter and 5 days after the adverse action letter is sent qualifies as sufficient time.
Stay in Compliance with Honesta Screening
From start to finish, Honesta Screening provides assistance with the employee screening process. We help you stay up to date with the latest guidelines and regulations. For specific legal advice, employers should consult with their lawyers.