By Kristen Wakulchuk


Fair Credit Reporting Act (FCRA) violation lawsuits are on the rise. This may not seem surprising at first blush, as litigation appears to be increasing in just about every area. However, were you aware that FCRA-related suits hit well over 4,000 in 2019? This compares to fewer than 2,500 in 2014. And FCRA compliance can make or break your business.

Why FCRA Compliance Matters to You

The FCRA is a consumer protection statute that regulates both companies who utilize third-party consumer reporting agencies (CRAs) for background checks as well as the agencies that provide those reports. And while the word “credit” is part of the law’s name, it’s only a start.

The FCRA was enacted in 1970 and was originally designed to help consumers resolve credit report inaccuracies. In 1996, its scope was expanded to include candidate and employee background reports. This consists of any information pertaining to criminal history, employment and education verification, motor vehicle matters, healthcare sanctions, professional licenses, and more.

To comply with the FCRA, CRAs must have reasonable procedures in place to ensure maximum possible accuracy. In addition, they must follow federal reporting regulations. As an employer, you also have obligations. For example, you are mandated to:

    • Clearly and conspicuously disclose that you are going to conduct an employment background check in a stand-alone document
    • Obtain written authorization to do so.
    • Follow adverse action procedures if you make an employment-related decision based on any negative information in a report.

Protect Your Business and Reputation

Maintaining FCRA compliance saves your company from costly settlements resulting from litigation, which can leave financial devastation in their wake. Think time, legal fees, dollars paid out to claimants, and distraction from your core business goals and activities. It can add up quickly and painfully.

 Even when the financial dust has settled, you may need to deal with damage to your professional and company image. To shed a positive light on the issue, a fully compliant background check process contributes to a positive candidate or employee experience. It illustrates how seriously you take your legal responsibilities, as well as the top value you place on your people.

Partner with the Right Screener

FCRA compliance is as complex as it is essential. When it comes to disclosure, authorization, adverse action, and related steps, the challenges can quickly escalate and seem to take on a life of their own. In order to rest assured that your compliance level remains unmarred, it’s critical to partner with a screening agency with a solid track record and top qualifications.

Partner With a Qualified Background Check Company!

At Chane Solutions, every background check we’re entrusted with undergoes a comprehensive quality control audit. Each component of every report is thoroughly analyzed for accuracy and validity. Our commitment to unparalleled customer service has helped make us a nationwide leader in screening services. Contact us today to learn more.

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