Have you applied for a job and been turned down because of a background report? A federal law, the Fair Credit Reporting Act (FCRA) requires employers to get your permission to run a background check before hiring you. Employment background reports may include credit history or public record history, such as criminal convictions, driving records, bankruptcies, and judgments. Employers use this information to determine whether to hire you, promote you, or keep you as an employee.

Did you get the job? If you answered no, then you need to know that the employer must comply with the FCRA before turning you down for the job or promotion. First, the employer must get your permission before running a background check. The authorization must be separate from the employment application.

Second, if the employer uses the background report to deny you the job or promotion, then the employer must give you a pre-adverse action notice, a copy of the background report, and a summary of your rights under the FCRA before turning you down. The adverse action notice must also include the name, address, and telephone number of the background report company, a statement that the background report company did not make the decision, a notice of your right to dispute false information, and the right to obtain a free report from the background report company.

If the employer does not get your permission to get your credit report or background report, fails to provide you with the appropriate summary of your rights, or pre-adverse action notice and a copy of the background report, you may be entitled to actual damages and attorney fees.

The background reporting company also has to comply with the FCRA. When a background report company sends the employer a report that has negative information, such as tax liens, convictions, or judgments, the background reporting company has to notify you that it provided your information to the employer or prospective employer.

Have you received notice that a background reporting company has reported negative public information to your employer or prospective employer? You have the right to dispute false information to the background reporting company. If the background reporting company does not delete the false information, then you may be entitled to actual damages, including denial of employment or promotion.

For further information on cases under the FCRA you can contact lawyers in our firm’s Consumer Fraud and Commercial Litigation Section at 800-898-2034.

Sources: Information obtained from RA Micah Adkins and Fair Credit Reporting Act, 7th ed., Nat’l Consumer Law Center (2010).

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