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on September 03, 2021 Tenant Background Screening Employment Background Screening FCRA Compliance

What are Consumer Rights During Background Checks?

What are Consumer Rights During Background Checks

If you're a reader of this blog, you're familiar with our frequent posts on FCRA compliance for employers using consumer reporting agencies for background checks. For employers, compliance with the Fair Credit Reporting Act is important to reduce the risk of FCRA violations and costly class-action lawsuits. For applicants, the FCRA protects their personal information, limits who has access to it and how it can be used. Let's take a closer look at how it protects job seekers.

What consumer rights do applicants have during background checks?

 

A Summary of Your Rights Under the Fair Credit Reporting Act (FCRA)

Part of an FCRA-compliant screening process is equipping applicants with A Summary of Your Rights Under the Fair Credit Reporting Act. This information offers the specific rights that are protected under the FCRA. This form is provided as part of the pre-adverse and adverse action procedures when conducting employment or tenant background checks on applicants. 

See also: What is the Timing of Adverse Action for FCRA Compliance?

The Right to Know What's In The File

The consumer has the right to know what information is included in their consumer report, including their credit score. This information can be requested at any time (usually one time per 12 months) but will be disclosed for free if the consumer faces any of the following situations:

  • Pre-adverse or adverse action
  • Victim of identity theft
  • Inaccurate information is listed due to fraud
  • Public assistance
  • Unemployed but expected to apply for employment within 60 days
 
The Right to Give or Deny Consent to the Records

Employers must request written authorization and consent before conducting a background check on an applicant. Consumer reporting agencies are also limited in whom they can share consumer information. Only those to have a "valid need" - creditors, landlords, insurers, or employers - can request and obtain access to applicant background reports.

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The Right to Ensure the Records are Accurate

Applicants can dispute any data that is false, incomplete, or inaccurate in their reports. Consumer reporting agencies must fix any inaccurate, incomplete, or unverifiable information, typically within 30 days. This also means that consumer reporting agencies cannot report outdated, untrue, or negative information about applicants, and if so, applicants can push back. 

The Right to Know if Information has been Used Against the Applicant

If an applicant is denied credit, insurance, housing, or employment, they have a right to know why. As part of the adverse action process, this means that they are granted access to their consumer reports as well as the name, address, and contact information for the consumer reporting agency. This also means that the CRA can face litigation if they do not correct false or untrue reports.

Therefore, it's in the best interests of consumer reporting agencies to also follow FCRA compliance and protect consumer rights during background checks. Employers must work with CRAs that employ FCRA-certified staff and are accredited by the Professional Background Screening Association (PBSA) to ensure compliance and reduce the risk of consumer lawsuits. 

We're happy to answer any questions about FCRA compliance and consumer rights during background checks. Contact VeriFirst to learn more.

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Ryan Howard

Vice President, Business Development at VeriFirst, a BYL Company

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