7.9: Fair Credit Reporting Act

Contributing Editor: Joseph W. Bartlett of Sullivan & Worcester LLP

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Abstract

As you hire employees and conduct background checks on them, you should be aware of the Fair Credit Reporting Act … and any counterparts of the same under applicable state law. The issue arises if the company uses an investigative service to help in checking the candidates' credit, reputation, and other personal characteristics. The statute impacts background checks produced by a "consumer reporting agency." Accordingly, unless the company conducts its own investigation, then there are notice, consent and reporting obligations. The Company's obligation is to provide the applicant with a document which discloses that a report may be obtained for employment purposes and asks the applicant to authorize the employer to go forward on that basis. There are different standards for "consumer reports," i.e., background checks from public and institutional sources, and "investigative consumer reports" … information found through personal interviews with neighbors, etc.

Sub-Topics

• 7.9.1: Fair Credit Reporting Act: Background Checks--Proceed With Caution (Testa, Hurwitz & Thibeault)