I’m sure you are aware of the Fair Credit Reporting Act (FCRA), which regulates the scope and flow of information between “users” and “furnishers” of consumer information. Not only does the FCRA regulate the exchange of consumer credit information between the credit bureaus and creditors in connection with mortgage lending, but it also regulates the exchange of consumer information between employers and credit reporting agencies that provide background reports.
These regulations are triggered when an employer orders a background check report, criminal, or motor vehicle records check. For many years, it was relatively uncommon to see lawsuits or FTC enforcement actions against employers for alleged violations of the FCRA. Now, times have changed. In the past few years, there has been an unprecedented spike in class action and single-plaintiff lawsuits against employers for alleged violations of the FCRA. As a result, compliance with the various provisions of the FCRA is essential for all employers that use background reports even in part to make hiring and employment decisions.
Earlier this year, the Federal Trade Commission (FTC or “the Commission”) staff published a report entitled, 40 Years of Experience with the Fair Credit Reporting Act: An FTC Staff Report with Summary of Interpretations. This report highlights critical portions which “provide important guidance on issues of statutory interpretation”.
As such, this is another area that we need to become familiar with and watch our P’s and Q’s. I’m going to add this to my stack of reading, at least for a cursory review, so I will be familiar with what the findings are suggesting in terms of compliance. If you would like to review the report, you may find it by clicking here.