FTC Says When Conducting Background Checks, Don’t Double-Dip!

On February 16th, the FTC published a blog post about the importance of organizations using consumer reports in compliance with the Fair Credit Reporting Act (FCRA). According to the FTC, it is important that organizations only use consumer reports for the purpose for which they originally obtained them and to refrain from using them for secondary reasons.

When conducting a background check on an applicant or employee, you must certify to the consumer reporting agency (background screening vendor) the purpose for which you will use it. You must then use the report only for that purpose. As an example, if you obtain a report for employment purposes, you cannot also use it to make a credit decision.

According to the FTC, the three important principles for users of consumer reports to keep in mind are:

  • If an employer makes a negative decision on a person based on a consumer report, it is important to notify the person with an adverse action notice;
  • The adverse action notice may be provided orally, electronically, or in writing; and
  • Employers must securely dispose of the consumer report when finished.

https://www.ftc.gov/news-events/blogs/business-blog/2017/02/background-checks-dont-double-dip

 

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