Highlights of the Fair Credit Reporting Act as Applicable for Background Check Compliance
Insolu, Inc. conducts background checks in support of our clients’ transactional requirements, routine business needs, litigation and/or background screening. Each investigation is conducted in compliance with the Fair Credit Reporting Act (FCRA).
Insolu, Inc. is considered a “consumer reporting agency” for FCRA compliance purposes. Our reports are considered either consumer reports or investigative reports as defined in the Fair Credit Reporting Act (FCRA).
A consumer report, in general, is defined as any “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 of mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer’s eligibility for authorized purposes under the provisions of the FCRA.
Reports summarizing the results of investigations by Insolu, Inc. in support of our clients’ general business and due diligence needs may be defined under the FCRA as investigative reports when “a consumer report or portion thereof in which information on a consumer’s character, general reputation, personal characteristics, or mode of living is obtained through personal interviews with neighbors, friends, or associates of the consumer reported on or with others with whom he is acquainted or who may have knowledge concerning any such items of information. However, such information shall not include specific factual information on a consumer’s credit record obtained directly from a creditor of the consumer or from a consumer reporting agency when such information was obtained directly from a creditor of the consumer or from the consumer…”
Additional Information: Employment Screenings
Many of the pre-employment screenings that we conduct are done to meet the requirements for “self-regulatory organizations,” which are defined in Section 3(a) 26 of the Securities Exchange Act of 1934; under Title I of the Sarbanes-Oxley Act of 2002; and “any board of trade designated by the Commodity Futures Trading Commission, and any futures association registered with such Commission”.
In the case of pre-employment screenings, a release authorization is provided to the employer by the potential employee stating the prospective hire has been provided with a copy of “Summary of Your Rights under the Fair Credit Reporting Act.”.
According to the FCRA: “…the term “employment purposes” when used in connection with a consumer report means a report used for the purpose of evaluating a consumer for employment, promotion, reassignment or retention as an employee.
An “adverse action,” results if employment is not extended to a candidate as a result of information contained in the consumer report or if information developed adversely affects a current employee’s continued employment.
 These include: (a) credit or insurance primarily for personal/family/household purposes; (b) employment purposes; or (c) any other purpose authorized under Section 604 [§ 1681b].
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