An overview of the key points of the Fair Credit Reporting Act (FCRA). Find out what rules background check companies must follow, how your information is protected, and what you can do when errors happen. Our consumer rights attorneys are here to help anyone struggling with background check issues.
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Background checks are almost unavoidable in job hunting. Estimates from the National Association of Consumer Advocates indicate that 94% of employers and 92% of landlords use background checks as part of their standard operating procedures. Unfortunately, these checks can contain errors that can cost a person jobs, housing, and financial opportunities.
This guide explains your rights step by step: what the law requires before a background check, what to do if the report is used against you, how to correct errors, and when to call a lawyer.
An employment background check is any report an employer obtains from a third party about a job applicant or current employee for employment purposes. Under the FCRA, when a third-party company compiles and sells that information, the report is a “consumer report,” and the company is a “consumer reporting agency.”
Typical employment reports can include any combination of:
The Fair Credit Reporting Act (FCRA), enacted in 1970, gives job applicants and employees a powerful set of rights, and it imposes strict duties on both employers and the background-check companies (called “consumer reporting agencies,” or CRAs) that supply them. When those duties are violated, the law provides for actual damages, statutory damages, punitive damages, and attorney’s fees.
A few key rules for employment background checks include:
Once run, a background check can be used to make a hiring decision. However, if that check is used as a basis for adverse action, the employer has a responsibility to inform the applicant. Examples of adverse action include: rejecting a job application, revoking an offer, termination, or denying a promotion.
Before an employer can take adverse action based on information from a background check, they must provide the applicant with a copy of the consumer report and a copy of “A Summary of Your Rights Under the Fair Credit Reporting Act.” The advance notice is intended to allow a person to dispute the screening’s findings.
The FCRA stipulates that a consumer should have a “reasonable amount of time” to dispute findings. That time period is not defined, but the Fair Trade Commission recommends that employers allow 5 business days to file a dispute.
An employer is required to send a notice after the waiting period has passed that includes:
Unfortunately, there are many ways an employment background check can go wrong. Whether the result of human error or automated computer systems, there’s no excuse for inaccuracies to appear on what can make or break a person’s employment. A few of the top complaints are:
Follow these steps if you find an error on your background check.
Request, in writing, a copy of the inaccurate report. You are entitled to a free copy from the CRA within 60 days of an adverse action.
Identify and Notate Errors:
Carefully review the entire report for any errors or discrepancies.
Each background check agency has a slightly different process and ways to dispute online. We highly recommend that you send a written dispute by certified mail to create a paper trail for the future.
If you believe a background check company has violated your consumer rights, contact us immediately. We offer free consultations and work on a contingency basis, so you don’t pay any attorney fees unless we win. Send your attorney any evidence of the FCRA violation.
The FCRA allows consumers to seek monetary damages to compensate for errors and adverse actions.
Lost wages, benefits, out-of-pocket costs, and emotional distress can be recovered under the FCRA, without the stricter standards that apply to some other federal laws.
Statutory damages of up to $1,000 per violation are available for willful violations.
The FCRA includes fee-shifting provisions that require the defendant (whoever is responsible for the violation) to pay the plaintiffs’ attorneys’ fees.
Each case is different, and your attorney will discuss what compensation you are eligible for and how much you may recover.
The FCRA provides every job applicant the right to a fair, accurate, and transparent background check process. If you believe a background check company or an employer has violated the FCRA, speak with an experienced consumer-rights attorney. All consultations are free, and our FCRA cases are handled on a contingency basis. That means you pay nothing unless your lawyer recovers for you. Let us help you protect your rights and get the compensation you deserve. We accept clients across the Carolinas and the Southeastern United States. Contact us for a free case review.