Credit Reports and the FCRA
Service : Compliance Services
Question: If I’m not running credit reports, does the Fair Credit Reporting Act still apply?
Response & Analysis:
Yes. A credit report is only one of several checks that fall under the definition of a “consumer report.” The Fair Credit Reporting Act (“FCRA”) applies anytime a company procures a “consumer report” on an applicant or employee. Section 603(d) of the FCRA defines a consumer report as:
Certain results always require review. Any criminal result “hits,” in particular, require an individual assessment that should be conducted in conjunction with the April 2012 guidance set forth by the U.S. Equal Employment Opportunity Commission (the “EEOC”). By conducting an individualized review and considering the EEOC guidelines, you can both avoid running afoul of antidiscrimination laws and afford an applicant the opportunity to be properly considered.
In addition to a credit report, this definition of a consumer report would cover many other types of background information, such as criminal history checks, employment verifications and license checks. So even if you choose not to run a credit report on an applicant or an employee, many of the other background checks you run – including just public record information – will fall under the definition of a “consumer report.” Thus, you are subject to the requirements of the FCRA even if you do not run credit reports.
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