How to Use a Consumer Report
A background check is defined by the Fair Credit Reporting Act as a consumer report in the United States of America. This is of particular significance to employers who want to check on the background of their prospective employees. This is known as a pre-employment verification and is done to screen the most deserving candidates.
A consumer report informs the employer about any criminal records that a job seeker may have. Eliminating such people helps reduce violence in workplace. The consumer reports are also used for the purpose of credit evaluation. The Fair Credit Reporting Act (FCRA) is authorized to regulate the collection and dissemination as well as the apt use of all consumer information.
A consumer report provides an overview regarding the individual’s creditworthiness, general character, criminal records, driving records, reputation etc. This helps reduce the crime rate in workplace and other sectors too. People looking for tenants may also ask for a consumer report.
Consumer Report: Information
Some of the information included in a consumer report is the driving records, credit records, social security number, court records, bankruptcy details, medical records, vehicle registration, military records, education records, character references, and sex offender history. The FCRA has placed rules stating that only outside companies may perform background checks. Employees are legally barred from conducting such checks within the company.
Also, depending on the state laws, the information furnished to the seeker varies. For example, in the state of California, the content that is released in a background report is limited following the labor codes and the fair employment guidelines of the state. The employer requesting for a report cannot view the arrest records and cannot discriminate against any future employee if he or she is found to have filed for bankruptcy.
Certain information such as educational information related to transcripts and recommendations are deemed confidential and are not released without the consent of the individual concerned. Medical and military records are also not released to all.
Consumer Report: Who Needs It
The background checks are widely conducted by various companies that conduct the employment screenings. The FCRA was amended in September 30, 1997 and this enables you to know if a background check on you is requested. This amendment act enhanced the disclosure and prior requirements of the employers who ask for consumer reports.
Under the Fair Credit Reporting Act, it is mandatory for the employer to obtain a written consent from any individual before he conducts a background check on the person. The consent letter must be a separate authorized document and not related to documents like the job application letter.
The FCRA also states that if the company decides to take any action against an employee or applicant based on the consumer report; it must give an “adverse action notice” to the individual and also send him or her copy of the consumer report.
Background checks are also done by banks. Decisions regarding opening new accounts and monetary transactions are done based on the past records. Homeowners perform background checks for tenant verification.
The disclosures are different depending on the purpose of the background check. It may be for tenant verification before leasing a house or to check the credit worthiness or for pre-employment verification. A consumer report helps prevent fraudulent activities at workplace and elsewhere.