The Consumer Financial Protection Bureau (CFPB) just announced an $8.5 million ruling against Sterling, a global screening company, after the organization violated the Fair Credit Reporting Act. Industry events like this remind us about the importance of background screening services and reporting. Whether you conduct your own background checks or use a screening company, here’s what you can learn from the Sterling ruling, including the three crucial aspects of background screening: accuracy, notification, and compliance.
When it comes to background checks, it’s crucial that your provider gets the facts right. Something as simple as a typo in a candidate’s last name can lead to a dramatically different background check. When you submit your candidate’s information for their background check, double-check everything, particularly names, addresses, and social security numbers and ensure that you’re providing your provider accurate information and documentation
If there is inaccuracy on your end, you and your screening provider should be in communication to resolve the concern. Background checks are essential to every organization-- ensure that you have a provider that supports and guides you throughout the screening process.
Now, if you know the information you provided is accurate, ensure that your provider is following FCRA regulations properly. Your screening provider must “employ reasonable procedures to ensure the maximum possible accuracy of the information about consumers” it includes in the consumer reports it prepares. A lack of accuracy can make a substantial difference, so make sure your provider has a strong reputation for compliant and accurate screens.
Whether you’re running your own screens or using a provider, your candidate must be notified throughout the screening process. Here are some of the notification steps the FCRA requires you or your provider must take:
Better protect your organization from the liabilities of poor notification by having a clear notification process. If you’re using an external screening provider, confirm that they have a process that compliantly notifies your applicants throughout the screening process.
While it’s tempting to want to know everything about someone’s past, the FCRA has clear rules about what kind of information background screening companies can collect. For example, in some states, background screening companies can’t mention crimes that were committed more than seven years ago. Some states are more strict. Unfortunately, countless organizations have been caught reporting crimes outside of this window.
Take the time to learn what your state’s laws are. If you see an outdated crime in a candidate’s background screen, that might be a red flag not for your candidate, but for your background screening provider.
Note: If your screening provider is reporting outside of FCRA regulations, they put you at substantial risk.
It’s also important to note that FCRA regulations apply to the candidate’s state, not your company’s or your background screening provider’s. If you hire out of state, make sure you’re following local regulations.
Background screening providers are under a lot of pressure to get results back to their clients as quickly as possible. While this keeps time to hire low, an inaccurate background screening provider can produce greater harm in the long-run. Your best bet is to find a background screening provider that delivers background checks quickly while taking the time to ensure screening accuracy, proper notifications, and FCRA-compliant checks.