FTC to Employers: Simple Background Check Disclosures Are Best

In order to maintain compliance with the Fair Credit Reporting Act, companies must make certain that the proper disclosures are made to prospective employees before running background and credit screening. Employers must include disclosures that both

  • inform them of their rights
  • and acquire their authorization

The FCRA classifies background and credit screening reports as “consumer reports” when said data is used to determine an individual’s eligibility for certain services, including employment, housing, credit, insurance, etc. All of the above is essential to maintaining a certain standard of living, so understandably, the FCRA came into existence to protect consumers from unfair discrimination and to ensure the appropriate use of personal information.

It can be daunting for employers to handle such protected data, so the FTC recommends making “clear and conspicuous” written disclosures available to applicants up front.

How to Keep It Simple

The FTC issued a list of DO NOTs to give employers a hand in writing up these written disclosures and avoid FCRA violations.

  1. DON’T use language that is intended to release you (the employer) from liability.
  2. DON’T include language that requires/requests the prospect to certify that all information on their job application is accurate.
  3. DON’T include any wording that requests the prospect acknowledge that your hiring decisions are non-discriminatory and legitimate.
  4. DON’T use authorizations that are overly broad which permits the release of info the FCRA otherwise prohibits from inclusion in a background check (ex. bankruptcies more than 10 years old).

Why the omissions? The FTC states that all of this “extra” only makes it more difficult for the prospect to understand the main purpose of the document. Additionally, by adding your own provisions, you may be treading into dangerous territory outside of FCRA compliance.


Let us know if you have any questions about maintaining FCRA compliance.

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