The federal Fair Credit Reporting Act (“FCRA”) can be confusing at times even though it has been in place for many years. One gray area includes which activities are covered under the FCRA. If an organization requests criminal background checks through a background screening company, or a consumer reporting agency (“CRA”) as named under the FCRA, it is fairly clear that the FCRA will apply to those screening activities. However, what about non-standard background screening? For example, if a company only conducts drug screening, does the FCRA and its obligations apply?
First, it is helpful to review certain definitions under the FCRA, which are found in § 603. AccuSource is a consumer reporting agency under the FCRA because it, “for monetary fees … regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties…” When AccuSource assembles information into a background screening report, we are acting as a consumer reporting agency. Additionally, a ’consumer report’ means any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer’s creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or 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 (A) credit or insurance to be used primarily for personal, family, or household purposes; (B) employment purposes; or (C) any other purpose authorized…” To summarize, AccuSource is a CRA, and we assemble information about a consumer into a consumer report for the requesting third party.
If a non-traditional background screening component is ordered through AccuSource and will be reported out by AccuSource to the third party, it is considered a consumer report under the FCRA. For example, if an employer sends an applicant for a drug test and AccuSource receives the drug test results from the laboratory and reports them to the employer, this report falls under the umbrella of the FCRA. Because it is covered under the FCRA, the requesting third party must ensure it provides any required disclosures under the FCRA and other applicable laws. It must also obtain the authorization of the consumer who will be submitting to the drug test. If a third party orders through AccuSource’s screening software and sends the background screening questionnaire (referred to as QuickApp) to the consumer, AccuSource’s standard form set includes required disclosures and authorization, including a reference to drug testing in the authorization. If a third party manually orders in the screening software or orders another way, it must ensure that it is providing any required disclosures and obtaining authorization prior to requesting the drug test. Be careful – a chain of custody form may not be sufficient to meet FCRA requirements. Additionally, the employer should also review other FCRA requirements, such as the adverse action process, to determine how they apply to the organization.
Please keep in mind that AccuSource clients sign a contract or other certification that they will comply with the FCRA and other related laws. Users of AccuSource’s screening software also certify upon account creation and recertify with each required password change that they will comply with the FCRA and other applicable laws. If you would like AccuSource to provide a complimentary review of your current background screening compliance program, please contact us at firstname.lastname@example.org.