May 10, 2016
Validity Team
The Federal Trade Commission (FTC) has issued new guidance to Background Screening Companies on what the law requires of them in relation to the Fair Credit Reporting Act (FCRA). Background Screening reports, known under the FCRA as consumer reports, may be factors in, “determining a person’s eligibility for employment, credit, insurance, housing, or other purposes and they include information “bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living” – FTC. The companies who provide/sell consumer reports are known as Consumer Reporting Agencies (CRA) and these companies must meet a number of legal obligations outlined within the FCRA, specifically the following:
For further detailed information on the subject and also what employers need to know related to the FCRA, please view the following sources:
https://www.ftc.gov/tips-advice/business-center/guidance/what-employment-background-screening-companies-need-know-about
https://www.ftc.gov/tips-advice/business-center/guidance/background-checks-what-employers-need-know