On May 10, 2016 the Federal Trade Commission (FTC) issued a letter of guidance to all background screening companies, or consumer reporting agencies (CRAs). The letter addresses the Fair Credit Reporting Act (FCRA) and a CRA’s related obligations when conducting background checks. As a CRA, Scott-Roberts and Associates complies with all of the mandates of the FTC and the FCRA so noted in this newsletter. Understand these new FTC guidelines and learn how they affect your business.
In brief, the FTC letter highlights the following:
- The definition of a consumer report, usually referred to as a background screening report.
- The CRA must follow reasonable procedures to ensure accuracy.
- The CRA is required to obtain certification from its clients regarding the permissible purpose of the consumer report. This may involve employment or tenant purposes.
- The certification must also state that the employer notified the applicant and received the applicant’s written permission to obtain a background screening report. It must also state that the employer will comply with the FCRA requirements and that the employer will not discriminate against the applicant or employee or otherwise misuse the information in violation of federal or state equal opportunity laws or regulations.
The FTC requires CRAs to:
- Provide information about the FCRA.
- Provide access to the consumer report should the applicant ask for it.
- Conduct a reasonable investigation when the applicant disputes the accuracy of the information and provide written notice of the results of the investigation.
- Understand that it is a violation of the FCRA to create unreasonable obstacles for applicants to exercise their rights under the FCRA.
Finally, the FTC discusses the use of public record information:
- The CRA must notify the person who is the subject of the report when public record information is being reported.
- The CRA maintains strict procedures designed to ensure that reported public record data is complete and up-to-date.
As a current or prospective client of Scott-Roberts and Associates, please make the time to review this important letter from the FTC.