Employers are not the only parties whose actions are governed by the FCRA with respect to background checks.
If an employer uses a company to compile a consumer report, that company is considered a Credit Reporting Agency (known as a “CRA”) under the FCRA. The FCRA requires that CRAs maintain reasonable procedures to assure the highest level of accuracy of the credit information that they report to employers. Additionally, CRAs are only allowed to provide consumer reports to someone with a “permissible purpose,” such as an employment background check. In the event that a consumer disputes credit information, a CRA is required to conduct a “reinvestigation” into the information reported, which requires the CRA to make a reasonable effort to determine the validity of the reported information. A CRA must also take proper steps to dispose of consumer information by either shredding, burning, or pulverizing the records (or destroying any related electronic information). Likewise, companies and groups that provide information to CRAs (known as “Furnishers”) are also governed by the FCRA with similar requirements as CRAs. Under the FCRA, Furnishers are restricted from sending certain information to CRAs, such as information that would cause a reasonable person to doubt the accuracy of the information or information that a consumer properly reported to a creditor as inaccurate. Additionally, if a Furnisher has reason to believe that information it has sent to a CRA is inaccurate or incomplete, it is required to promptly notify the CRA of the issue and provide the necessary corrections to the CRA.
As is the case of an employer, if a CRA or a Furnisher violates the FCRA, it may take the force of a lawsuit to hold them accountable.