Between 2013-2014, the number of class action lawsuits involving violations of the Fair Credit Reporting Act have tripled from previous years.  The FCRA allows for statutory damages, punitive damages and attorney’s fees.  It’s no wonder that lawyers are looking for the slightest violations to go after these companies that step out of line with their FCRA compliance.

Unfortunately, because of the continued success of plaintiffs, it’s highly likely that these types of lawsuits will continue to occur.   There is one sure fire way to make sure that your company may never have to face this type of litigation:  know the FCRA and make sure your company is compliant with the rules and regulations surrounding compliance.

There are a few things that companies continue to find themselves doing that put themselves in a precarious position.  Some of these things are:

  • Failure to provide a copy of the background check when asked
  • Failure to notify an applicant that they will have a background check conducted
  • Failure to obtain signed authorization to conduct the background check
  • Failure to provide a copy of the background check prior to taking adverse action
  • Failure to provide a separate document that notifies the applicant of the background check
  • Failure to include information about the nature of the background check
  • Failure to provide a copy of the Summary of Consumer Rights

In 2014, PeopleG2 provided all of its clients updated Disclosure and Authorization forms, Notification of Background Check forms, and a Summary of Consumer Rights.  These forms were created by PeopleG2 and approved by Pamela Devata, a Partner with Seyfarth Shaw LLC.  Clients of PeopleG2 can rest assured that the forms they are providing applicants meet the standards expected in the FCRA.

The rest is up to you!  It is important that all companies familiarize themselves with not only the FCRA, but also the EEOC.  It is also important that your applications include all of the necessary disclosures and other forms that are mandated to be given to an applicant prior to commencing with a background check.  It is of course also recommended that every company conduct a regular audit of hiring policies and procedures is always recommended to ensure that your company is up to date on its understanding of changes in the law.  Making an assumption about guidelines, or about the law “as it was” is what will get companies in trouble.  Be up to date, and protect your company by ensuring your hiring policies and procedures are in line with the FCRA.

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