The Fair Credit Reporting Act (FCRA) sets the standard for background checks—and for protecting your organization from risk.
What Is the FCRA?
The FCRA is a federal law that regulates how consumer information is collected, shared, and used. It outlines responsibilities for both the Consumer Reporting Agency (CRA)—which compiles the background report—and the employer, who uses it for employment purposes.
Key FCRA Requirements for Employers
To remain compliant, employers must follow these steps when using background checks for hiring or employment decisions:
- Disclosure & Authorization
Employers must provide a clear, standalone written disclosure and obtain written authorization before ordering a background check. - Use for Permissible Purpose Only
Reports must only be used for permissible purposes—such as employment or tenancy. Using them otherwise can result in serious legal consequences. - Adverse Action Process
If information in the report may affect the hiring decision, employers must:- Send a pre-adverse action notice with a copy of the report, the FCRA Summary of Rights, and any applicable state notices.
- Allow at least 5 business days for the candidate to dispute inaccuracies (some states may require more time).
- After this period or once a dispute is resolved, issue a final adverse action notice.
- Maintain Confidentiality
Background reports contain sensitive personal data. Employers must ensure these reports are stored securely and only accessible to authorized personnel.
Why FCRA Compliance Matters
Failure to comply with the FCRA can lead to lawsuits, fines, and reputational harm. Common violations include:
- Improper or unclear disclosures
- Combining authorization with job applications
- Skipping the adverse action process
How CIC Helps Employers Stay Compliant
Corporate Intelligence Consultants (CIC) simplifies FCRA compliance with:
- Screening packages designed with built-in compliance tools
- Sample forms for disclosure, authorization, and adverse action
- Step-by-step support throughout the process
- Monitoring of legal updates to keep clients informed
Final Thoughts
The FCRA is more than a legal requirement—it’s a framework that protects employers from risk. With CIC’s support, organizations can confidently navigate employment screening while meeting federal and state regulations.
Protect your business. Stay compliant. Hire with confidence.
Contact CIC today to review your current process.