Fair Credit Reporting Act (FCRA) Questions

What is the FCRA?

The federal Fair Credit Reporting Act was enacted April 25, 1971. The FCRA created the first federal regulation of the consumer reporting industry citing "a need to ensure that consumer reporting agencies exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer's right to privacy".

How Does ChoicePoint Keep You FCRA-Compliant?

For purposes of volunteer screening, ChoicePoint imposes all requirements of employment provisions of the FCRA. This is a protective approach that ensures VolunteerSelect users are FCRA compliant at all times. When your company orders a Consumer Report, it is automatically subject to certain provisions of the FCRA. A Consumer Report is defined under the Act as "a written, oral or other communication of any information by a consumer reporting agency bearing on a consumer's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living" used in whole or in part as a factor in establishing a consumer's eligibility for credit, employment, insurance or other benefits. These are "records only" type reports and do not include interviews with current or former employers, schools or other institutions, or business or personal references.

Although these types of reports are not available on VolunteerSelect, certain provisions of the FCRA also deal specifically with your responsibilities if you order a category of reports called Investigative Consumer Reports. An Investigative Consumer Report is that type of report containing information pertaining to the consumer's character, general reputation, personal characteristics, or mode of living that is derived through personal interviews with friends or associates of the consumer.

VolunteerSelect Report Content Limitations

The FCRA provides that Consumer Reports and Investigative Consumer Reports may not contain adverse information more than seven years old, EXCEPT arrests, indictments and convictions may be reported for seven years after disposition, release or parole.

Customer Requirements

When you order Consumer Reports or Investigative Consumer Reports through VolunteerSelect you must certify the following to ChoicePoint:

• you are requesting the report and use the information only for that purpose.
• that you will comply with all disclosure requirements of the FCRA (including adverse action provisions).
• that the information will not be used to violate any federal or state Equal Employment laws or regulations.
• that Consumer Reports or Investigative Consumer Reports will not be ordered for retention or promotion purposes without the consumer's authorization.

PRIOR TO ORDERING

If you order Consumer Report, you must notify the consumer that such a report may be made and will include information as to his/her character, general reputation, personal characteristics and mode of living.

Pre-Notification:

• must be in writing, mailed or otherwise delivered to the consumer (e.g., notice may be provided via your application form; for EMPLOYMENT PURPOSES ONLY you may not include the notice via your application form because a stand-alone document is required); and must be issued before the request for a consumer report; and
• be issued before the request for a consumer report.
  

Consumer Authorization:

• provide written authorization before the request of a consumer report, this can be included with the pre notification.

Post-Notification:

When you deny the volunteer an opportunity to participate with your organization, either in part or in whole, because of information in a Consumer Report or Investigative Consumer Report from a consumer reporting agency, you must notify the consumer of that fact and provide him/her with the following:

• copy of the report- EMPLOYMENT PURPOSES ONLY
• description in writing of the consumer's rights to obtain a free report within 60 days to dispute any inaccuracies with the consumer reporting agency;
• reporting agency's name, address and telephone number
• a statement claiming that the consumer reporting agency did not make the adverse decision and can not provide the reason for the adverse decision
• notification to the consumer of the adverse action which can be orally, in writing or electronically delivered.

ChoicePoint has established consumer disclosure units to make it easier for consumers to receive copies/information contained in Consumer Reports. For credit disclosure, call 1-800-270-3435. For employment disclosure, call 1-800-845-6004.

State Laws

Several states have passed legislation similar to the federal FCRA and those provisions covering your responsibilities as a customer are quite similar to those included in the federal law. However, a few states have different pre- and post-notification provisions that must be used with consumers in those states. Please check with your legal counsel for analogous state statutes that may affect your business.

The FCRA amendments of 1996 above pre-empted analogous state legislation in the following areas:

• Time frames and notification procedures in cases of disputed accuracy (See, section 611).
• Duties required of those who take adverse action (See, section 615 (a) and (b)).
• Obsolescence periods under section 605.
• Consumer disclosure form and substance.
• Prescreening of Consumer Reports
• Duties required of those who use reports in certain transactions not initiated by the consumer.

Civil Liability

Failure to comply with FCRA requirements imposes civil liability which includes:

• An individual who knowingly obtains a report without a permissible purpose or under false pretenses is liable to the consumer for actual damages with a minimum penalty $1,000.
• Any entity who willfully fails to comply with a provision of the FCRA is liable to the consumer for actual damages. The penalty has a minimum of $100 and a maximum of $1,000.
• Negligent noncompliance of FCRA requirements may result in liability to the consumer of actual damages, costs and attorney's fees.
• Attorney's fees are available to the prevailing party in defending motions brought in bad faith or for harassment purposes.