Background checks include a lot of very personal information that is also easy for others with bad intentions to misuse. Just for those reasons, there is a federal law known as the Fair Credit Reporting Act or FCRA for short. This is the law that protects us and yet allows others insight into our background records. Although this law is good to have, it only regulates and rules over credit reporting agencies that comply with it and not the many other companies that offer instant background checks at low prices, database checks and other instant checks.
When a consumer reporting agency, also referred to as a CRA, complies with the FCRA then it abides by a certain set of rules that are aimed at keeping both the party requesting a background check compliant as well as the person who it is being done on. It used to be controversial though, because although it gave every person a right to dispute any information included in their background check, the potential victim of wrongful data did not have a chance to see the reports provided by the CRAs. This has changed though, and ever since the FACTA (Fair and Accurate Credit Transaction Act) took effect in 2003, which is pretty much an extension of the FCRA, people can demand to see their report for themselves and any employer or credit agency, for example, will have to provide the person with a copy of what they received. This was an important step towards protecting the rights of people having background checks done.
What the credit reporting agencies are and what are their responsibilities
The FCRA, as already mentioned, rules over credit reporting agencies that abide by and meet certain standards. There are no set lists of accredited companies, but many do have the necessary credentials. Common examples of reporting agencies would be those that usually have contact with people, like mortgage lenders, banks, credit card companies, all kinds of courts, collectors and also past or present employers. One would think that because of who is allowed to provide information, that all data would be correct. However, this is not always the way things are and many consumers actually do find mistakes. The FCRA has created guidelines for the reporting agencies to follow because of this fact. For this reason, reporting agencies are required to provide only complete and correct information, and to correct any information that is found to be in error.
If a person having the background check done thinks there is inaccurate information reported, then these reporting agencies also have to investigate the claim, if they indeed reported inaccurate information. The investigation has to be completed within 30 days and then reported to the person that made the dispute in the first place. Needless to say, if information was wrong then it has to be corrected. An example of this would be a credit agency reporting inaccurate financial information on a credit report.
There are many reasons that an employer would ask for a background check that complies with the FCRA. For example, an employer may prefer credit reporting agencies and background check providers that comply with the FCRA because these companies are most familiar with the rules and legislation that regulate background checks.
Why FCRA non compliance background checks?
There is another option, though. Many companies offer background screening reports that do not comply with the FCRA. They rely solely on the results of the many databases available for purchase and only report information included in the public record. Reasons for FCRA non-compliant background check reports would be to do private research on the criminal history of someone you met online or a neighbor.