FCRA Disclosure And Authorization Requirements Straight From The FTC

Kim Moutsos

It seems like just last month we featured cautionary tales of FCRA disclosure and authorization gone wrong

Well, the FTC just wrote the book blog on what not to do

What Does The FTC Have To Do With The FCRA?

The Federal Trade Commission enforces the Fair Credit Reporting Act with the help of the Consumer Finance Protection Bureau. So it's pretty much the authority to follow.

Remember, the federal FCRA applies any time an employer runs a pre-employment background check (or a check on an existing employee) through an employment screening company. 

That means, even though your state may have separate consent (a.k.a. disclosure and authorization) requirements, you still have to follow FCRA rules. 

What's New In The Advice? 

FCRA disclosure and authorization rules haven't changed. But the new post clarifies a few gray areas. It also makes the debatable claim that following FCRA rules is "easy." 

Of course, our FCRA attorney has said that compliance doesn't have to be scary or hard. And it doesn't. But it can seem complicated. 

If you're working with a reputable employment background check company, you should have access to FCRA compliant disclosure and authorization forms. (You can get GoodHire's consent form here.) Some companies prefer to use their own.

Download The Ultimate Guide to Background Check Compliance

Whether you use a custom version or one from an employment screening company, check your form against this government-issued list of consent "don'ts." 

1. Don’t include a liability waiver.

Here's how the FTC puts it:

Don’t include language that claims to release you from liability for conducting, obtaining, or using the background screening report.

2. Don’t ask candidates to certify the accuracy of their application on the form.

In the FTC's words:

Don’t include a certification by the prospective employee that all information in his or her job application is accurate.

3. Don't ask candidates to agree that you make hiring decisions for non-discriminatory reasons.

What the post says, exactly:

Delete any wording that purports to require the prospective employee to acknowledge that your hiring decisions are based on legitimate non-discriminatory reasons.

4. Don't ask for authorization to include non-FCRA compliant information.

Here's the advice in more detail:

Get rid of overly broad authorizations that permit the release of information that the FCRA doesn’t allow to be included in a background screening report – for example, bankruptcies that are more than 10 years old.

Anything Else To Know About FCRA Compliance? 

Plenty. The agency also published guidance for background screening companies. You can read the whole list here.

A highlight of the provisions: A reminder that employment screening companies should "honor the rights of applicants and employees."

Wouldn't it be great if your background check company realized that's not just the law, it's the right thing to do?

We think so, too. 

Ban The Box Vs. FCRA Adverse Action

Kim Moutsos

Kim Moutsos


Editor in chief of the GoodHire blog The Works, Kim Moutsos seeks out the latest advice on hiring, compliance, background checks, and the future of work. When she’s not reading, writing, or wrangling other writers, she’s likely on one of her daily runs (over 777 consecutive and counting).

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