When an employer seeks a consumer report, they must follow FCRA guidelines to properly obtain and use the information. The process for this is twofold.
First, the employer must disclose to the applicant or employee that it seeks to procure a consumer report and must obtain the employee’s written consent. Second, the employer must disclose to the employee or applicant that, based on what is found in the consumer report, they may take “adverse action” such as no longer considering the person for employment or promotion.
Applicants have specific rights under the FCRA. The following steps can be taken to dispute information provided in a consumer report if they feel it is inaccurate.
Identify the CRA
You must receive notice if an employer used information in your file against you. If an employer takes an adverse action against you that is based, in whole or in part, on information contained in a consumer report, they must tell you (usually, through a written notice). The notice must give you the name, address, and telephone number of the CRA that provided the information.
Notify the CRA of the dispute
You have a right to dispute incomplete or inaccurate information. If you identify information in your file that’s incomplete or inaccurate, notify the CRA directly with the dispute. The CRA will re-investigate without charge and record the current status of the disputed information within thirty business days.
Upon completion of the re-investigation, within five business days of the CRA’s decision, the agency will provide you notice. Whether in writing or through another authorized means, the notice contains the results of the re-investigation. If the CRA determines that your dispute is frivolous the agency will inform you of that determination, along with its reasons, and your rights under the FCRA within five business days.
Notify users of the consumer report
Upon completion of the re-investigation, if the information you disputed is inaccurate or cannot be verified, the CRA must delete the information and notify you of the correction. You have the right to request that users of your consumer report receive notification of any disputed information they previously received within the statutory time frame.
State and Local Level Regulations
Some levels of government go even further to protect your rights. Various states and cities also adopt their own pre-employment screening laws in addition to the FCRA. In Washington, employers may not procure a consumer report for employment purposes related to a person’s credit unless the information is substantially job-related.
In addition, the City of Seattle has a Fair Chance Employment Ordinance. This ordinance places additional restrictions on criminal history questions on applications. It also requires the employer to provide a “legitimate business reason” to deny a job based on a conviction record.
Following adverse action laws both on the Federal and state/local levels are ultimately the responsibility of the employer. Partnering with an established and accredited screening company though will help employer to navigate the legal landscape of these laws. This sets them up for success in these tricky situations. For more information from Alliance 2020 as an accredited screening company, see our Resources for Consumers.