FCRA Dos and Don’ts

The Fair Credit Reporting Act (FCRA) is a frequent subject of litigation, with the format of the Disclosure and Authorization documents constantly being challenged. To steer clear of trouble, the information in your FCRA Disclosure and Authorization forms should be simple and easy to read.

The FCRA Disclosure and Authorization should be two separate, stand-alone documents, and not part of an application. The information in these two documents must be easy to understand, so using simple language will minimize the risk of confusion.

The FCRA Disclosure is a notification to an applicant that the employer may run a background check, and it must be clear that the background check is to be used for a hiring decision. It should instruct an applicant or employee of the nature and scope of the consumer report, and in what instances a consumer report may be obtained.

The FCRA Authorization form is an acknowledgment that a background check may be done pre-employment or during the term of employment. If an employer wants the ability to use the FCRA throughout the term of employment, the authorization must have language indicating so.

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 suit in a state court, a consumer may find more favorable judges and juries. For the past couple of years, the Notice of State Rights information has been listed on the authorization form, but with the recent Ninth Circuit update, we suggest you provide the Notice of State Rights as a stand-alone document, as well, and ensure the language for each state is clear and simple for the applicant.

Applicants are frequently confused about the word “credit” in the Fair Credit Reporting Act and are not always clear about what type of background screen is going to be processed. Hopefully, providing an applicant a copy of the Summary of Rights will minimize the confusion and inform them of what steps they can take to dispute information obtained in their background check.

If you would like a sample FCRA Disclosure and Authorization form, please contact Employers Council’s Pre-Employment Screening Department at 800.884.1328.