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Fair Credit Reporting ActThe federal Fair Credit Reporting Act (FCRA) sets a national standard that employers must follow in employment screening. To be covered by the FCRA, the Federal Trade Commission (FTC) says that a report must be prepared by a consumer reporting agency or business that assembles information on consumers for the purpose of furnishing consumer reports to third parties.
Under the FCRA, the employer must obtain the applicant's written authorization before the background check is conducted. The authorization must be on a document separate from all other documents such as an employment application.
Complete FCRA ComplianceUnder federal law, if the employer uses information from the consumer report for an adverse action, such as denying the job applicant, terminating the employee, rescinding a job offer, or denying a promotion, the employer must:
- Give the applicant a pre-adverse action disclosure form that informs them of their rights under the FCRA and a copy of the report. This must be done before any adverse action is taken.
- After the adverse action is taken, you must give the applicant an adverse action notice containing the name, address, and phone number of the employment screening company, a statement that the employer made the adverse decision (not the consumer reporting agency), and a notice that the individual has the right to dispute the accuracy or completeness of any of the information in the report.
PeopleCheck will work with your company to ensure that every legal step is followed and that your company remains 100% FCRA Compliant.
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