Provisions of the FCRA

There is a federal law in the United States known as the Fair Credit Reporting Act or the FCRA to prevent how the information contained in the public records are used for the purpose of conducting the background checks. This is especially important for background checks as these deals with a considerable amount of personal information which can be misused by the individuals who have bad intentions.

Provisions of the FCRA

The FCRA was enacted to protect the rights of the individuals while at the same time allowing companies and other agencies to look into their personal details for conducting a background check. This act regulates the activities of all credit reporting agencies as well as the consumer reporting agencies that need to report to it.

The consumer reporting agencies also known as the CRAs need to comply with the set of rules of the Fair Credit Reporting Act for accessing, using and distributing the information contained in the Individual’s public record for the purpose of conducting background checks. The rules and guidelines of the FCRA need the compliance of the agency, party or the company that requires conducting the background check as well as the individual who is the subject of the background check.

In the beginning stages there were a lot of controversies over the way that the information contained in the public records were used or distributed. While every person had the right to argue over the personal details to be included in their public records they did not have the right tot view the details included in their public records or how these information was used by the consumer reporting agencies. In addition individuals had no option to correct any inaccurate information contained in their criminal history records, background check records or public records submitted by the consumer reporting agencies.

FCRA Amendment

This was altered after the FACTA or Fair and Accurate Credit transaction Act was enacted. The act, is, in fact an extension of the FCRA.   FACTA makes sure that the individuals not only have the right to view the report of the credit reporting agencies but also receive a copy of their background check report sent to the company that had requested for conducting the background check.
 

The companies that require using the personal information about any individuals for conducting background checks for the purpose of hiring, suspension, promotion or for termination purposes now need to be acquainted with the procedure of the adverse action under the FCRA. This is because the FCRA considers the employment decisions of the companies that are based on the background record of the individual to be an adverse action decision.

An employment decision based on adverse action has the potential to harm the prospects of a potential or a current employee. So any decision based on the adverse action require to fulfill certain conditions (under Section 604 of the FCRA) including notifying the concerned individuals through written letters known as the pre-adverse action letter as well as the adverse action letter. 

The FCRA plays an important role in regulating how the personal information as well as the details of a public record is used by a third party especially for the purpose of conducting background checks. To learn more about the guidelines and the parameters of the FCRA you can visit: http://www.ftc.gov/bcp/edu/pubs/business/credit/bus08.shtm