Are you following Fair Credit Reporting Act Guidelines?

We all know an applicant must sign the Fair Credit Reporting Act (FCRA) Disclosure and Authorization before an employer can run a background check through a third party. But do you know how significant it is to use the most current forms?

Consumer Reporting Agencies (CRAs) have been watching a very important case involving how information on a background investigation is reported, what information is reported, and compliance with the FCRA. Spokeo, Inc. v. Robins. In a nutshell, Robins claimed the information reported about him in his background check was inaccurate. Even though the information reported was favorable, he still filed suit.

This case went to the Supreme Court, which concluded that Robins had not been harmed, as he had not experienced an economic loss or loss or employment. The Court then remanded the matter back to the Ninth Circuit Court of Appeals and sent the case back the 9th Circuit, which had already concluded that Robins had suffered harm.

The FCRA is a federal law, but Congress has given consumers the option to bring lawsuits in either federal or state courts, which attorneys are starting to capitalize on. The federal courts have strict guidelines, so by filing a suite in a state court, a consumer may find more liberal guidelines, judges and liberal juries.

The point to the story is, CRAs and employers must be super vigilant on compliance with the FCRA Disclosure & Authorization and how background investigations are processed, because there are very savvy attorneys who will find the loopholes and exploit it. If an applicant disputes any information provided in a background investigation, the employer and CRA should communicate what is being disputed and conduct a re-investigation to maintain a defendable background investigation process.

Some states have specific guidelines regarding background investigations, which should be taken under advisement, but the CRA and employers should always adhere to the FCRA guidelines on the federal level first. Check with MSEC for guidance with background investigations and to provide the most up-to-date disclosures and authorizations.