To be fair, complying with the Fair Credit Reporting Act (FCRA) doesn’t make the top ten of most HR dream task lists. But it is an absolutely necessity to avoid heavy fines or possible class action exposure.
The majority of companies don’t fail FCRA compliance intentionally. But with strict procedures, there are a lot of areas where noncompliance can occur. These errors generally fall into three categories:
- Not paying close-enough attention to detail in forms and reporting
- Lax notice and consent processes
- Poor handling of adverse actions on negative reports
How can you avoid these mistakes?
1. Be meticulous when it comes to forms
Extensive paperwork and FCRA compliance go hand in hand. We all agree that paperwork can be tedious, which can lead to looking for loopholes. Typically, that means minimizing the number of forms you require applicants to sign by combining similar items for their consent. Unfortunately, there isn’t an easy way out when it comes to FCRA compliance – all forms are necessary.
The FCRA’s notice and consent procedures are prescribed with exacting detail, down to the correct font size. If you understand all the rules and make compliance a routine, your company will be better off in the long run.
2. Don’t conduct background checks without knowledge or consent
The employment application needs to ask potential employees for written consent before a candidate’s background check. Some companies ask, but only after a background check company runs the reports. Getting these two steps out of order violates FCRA policy and will put your company at risk of a stiff fine or lawsuit. Also, keep in mind separate forms are needed for requesting written consent to credit or criminal history screening.
3. Understand and follow background check disclosure procedures
The FCRA ensures that a specific notification process is in place to allow the applicant or employer time to respond to and correct an inaccurate report. We recommend waiting six business days between notices.
How Signet Screening can help
Signet Screening has extensive knowledge on how companies achieve FCRA compliance. Keeping our clients FCRA compliant and free from unnecessary consequences is one of our top priorities, says President Matt Messersmith.
“Before we run any reports, we make sure we have consent from every candidate,” Messersmith said. “Also, when we return reports, we always advise companies on the appropriate disclosure procedures.”
Contact the experienced Signet Screening team to see how we can deliver a customized pre-employment solution that delivers better hiring and improved business results. Follow us on Facebook, Twitter and LinkedIn for additional information.
