Before You Screen

If you are an employer looking to use consumer reports to make employment decisions (i.e. hiring, retention, promotion, or reassignment), you must comply with the Fair Credit Reporting Act (FCRA) in addition to any other applicable state and Federal laws. The Federal Trade Commission (FTC) enforces the FCRA. Knowing your obligations and when you have permission to utilize a consumer report is important. You must take certain steps before you can obtain a consumer report, as well as before and after you take an adverse action based on that report. You will want to further discuss your obligations under the FCRA with your employment attorney, especially if you intend to take adverse action against an applicant or employee as a result of any information contained in a consumer report.

Under the FCRA, a background check would be considered a consumer report and can be used to make decisions concerning employment. An employer may obtain an applicant or employee’s consumer report (background check) for employment-related purposes if the employer (1) gives the applicant or employee a clear and conspicuous written disclosure notifying him or her that a consumer report may be obtained, and (2) obtains written authorization from the applicant or employee. A Summary of Consumer Rights must accompany the disclosure mentioned above.

Your firm must provide ActiveTracks with certification that you have provided the [applicant or employee/subject of the report] (“consumer”) with all necessary notices and disclosures under the FCRA and any applicable state law; that you have obtained the consumer’s written permission to procure the requested consumer report; that you intend to use any consumer report provided by ActiveTracks for valid employment/business purposes only in compliance with the FCRA and all applicable state laws; and that you will comply with your obligations under the FCRA in the event that you choose to take adverse action against the employee based on the information in the consumer report.

Once these obligations are met, ActiveTracks can then conduct screening research on your subject. Again, we recommend that you discuss all employment policies, including use of consumer reports, with your employment attorney in order to comply with all state and federal laws regarding this topic. For more information, please visit the FTC’s website and read the article Using Consumer Reports: What Employers Need to Know [FTC.gov]