Is your firm performing background checks covered by the Fair Credit Reporting Act (FCRA)? If you are getting background checks from a Consumer Reporting Agency, you are covered under the FCRA. Suppose your firm is not complying with the disclosure requirements of the Fair Credit Reporting Act. You might think, what’s the big deal? So what if a piece of paper is not included. Or so what if the correct piece of paper isn’t in the right place. How can that harm us?
It can significantly harm your firm. This area of non-compliance is ripe for class action lawsuits. And the possibility of winning a class-action lawsuit is a clarion call to plaintiff attorneys.
Look what happened to Chuck E. Cheese, also known as CEC Entertainment, Inc. Top Class Action reports that this company agreed to a $1.75 million settlement in a class action lawsuit filed by 28,000 people. In the court document, the Plaintiffs allege that Defendant violated the FCRA and related statues by using background check disclosure forms in employment applications that contained extraneous information, such that the forms did not solely consist of the disclosure. More specifically, Plaintiffs claim that the restaurant’s pre-authorization form for background checks was buried underneath other employment application information and liability release forms. Per the FCRA statutes, employers cannot perform a credit or background check on a potential employee without that individual’s permission, which must be given on a separate pre-authorization form.
So what’s the answer? Besides the obvious advice that your forms should comply, we suggest that you have applicants complete the process on-line. That way there is no paper to manage and no sensitive identifying information laying around in someone’s office on paper.
We have a process that we call our QuickApp. It is available at no charge. It allows you to either send an email to an applicant with a link that takes them to secure pages on our web site or a custom link just for your firm. If you are using a Consumer Reporting Agency to provide you background investigations and they cannot provide you with this service, contact us.