FCRA Compliance

The Fair Credit Reporting Act (FCRA) is United States Federal legislation that regulates the collection of credit information, as well as access to credit reports. This also helps ensure the fairness, accuracy, and privacy of personal information that is collected through credit reporting agencies.

When running background checks, businesses must abide by the rules of the Fair Credit Reporting Act (FCRA). In order to be compliant, the FCRA requires that an employer meet the following:

• Permissible Purpose
  An approved reason under the FCRA to conduct a background investigation (e.g., credit, employment, tenant screening, insurance, government license, child support enforcement, or court order)  
  
  
• Disclosure
  Before ordering a background check, employers must provide disclosure in a clear and conspicuous written document.
  
  
• Authorization
  The employer must obtain written authorization from the candidate, consenting to perform a background check.
  
  
• Adverse Action
  Employers must follow the adverse action process before denying employment based upon the background report.

Despite it being the law, many companies fail to send adverse action notices.  It’s important that your HR and compliance department remain up-to-date on all hiring requirements and procedures to avoid violations and/or lawsuits.

DISA Global Solutions’ background check services assists employers with remaining FCRA compliant, as it relates to adverse action. DISA provides our corporate clients with three* email notifications, which include:

1. Pre-adverse notice
2. Summary of rights under the FCRA
3. Copy of the background report
4. *Adverse notice** (required only if employment is denied based solely on the background check).

**For those who are enrolled in DISA’s consortium (site access) program, we will directly mail the applicant the adverse action letter.