background screening: transforming your business decisions part 1

The Basic Truths About Background Screening, Part 2 Copyright © 2015 TRAK-1 Technology, Inc. All Rights

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The Basic Truths About Background Screening:

Transforming Your Business Decision – Part

Two

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Trak-1 is an Accredited Member of NAPBS


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Your Host: Rick Coltman

Director of Strategic Marketing and Alliances,

Trak-1 Technology, Inc.

• Please Post Any Questions or Comments You Have in the Comments

Section.

• Want Further Information or Have Additional Questions? Contact Trak-1 at

[email protected]

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Webinar at http://trak-1.com/webinar

Your Presenter: Matt Graham

VP of Operations, Trak-1 Technology,

Inc.

mailto:[email protected]

http://trak-1.com/webinar


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What Key Federal

Law Governs

Your Background

Screening

Program?


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Federal

Credit

Reporting

Act


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Regulates The Collection,

Dissemination And Use Of

Consumer Information, Including

Consumer Credit Information.

Fair Credit Reporting Act, 15

USC 1681 Et Seq. (Oct. 26, 1970) (Fcra)


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This Allows Consumers

To Receive One Free

Credit Report Per Year.

Amended By The Fair And Accurate

Credit Transactions Act (2003) (FACTA)


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Was Originally Intended To Regulate

The Three Major Credit Bureaus.

TheFC

RA


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Today The Act Is Widely

Understood And

Interpreted To Also

Regulate Background

Screening Companies

And Users Of Any

Consumer Report


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By The Federal Trade

Commission And Consumer

Financial Protection Bureau

And Consumers. Civil

Liability With Damages And

Government Imposed Civil

Monetary Penalties May

Apply.

The FCRA Is Enforced


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What is the Purpose of the FCRA?

Protect

Consumers

2 Regulate Users Of Consumer Reports

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What Qualifies As A

Consumer Report

Under The FCRA?


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BACKGROUND SCREENING REPORTS

CONTAINING NO CREDIT

INFORMATION ARE A FORM OF

CONSUMER REPORT AND ARE

GOVERNED BY THE FCRA.

KEY POINT:


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“A Written Or Oral

Communication That

Bears On A Consumer’s

Credit Standing, Credit

Capacity, Character,

General Reputation,

Personal Characteristics

Or Mode Of Living…”


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“…Used Or Expected To Be Used

Or Collected In Whole Or In Part

For A Permissible Purpose” (I.E.,

For Employment, Residential

Living, Government Licensing,

Credit Extension, Etc.). Defined

Specifically In The Act And Does

Include Volunteer Screening Per

Regulatory Interpretation.


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It Is Important To Note That

Reference Checks Conducted

With A Third Party Are A Form

Of Investigative Consumer

Report And Are Governed By

The FCRA.


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Yes, The FCRA is King

But What Other Laws Should You Consider?


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Prohibits Disclosure Of Personal

Information Without The Express

Consent Of The Consumer With

Limited Statutory Exceptions;

And Imposes Record-keeping

Requirements On “Authorized

Recipients” Of Consumer

Records.

Driver Protection Privacy Act of 1994 (DPPA)


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Opened Access In Those States

Adopting It To The FBI’s National

Criminal Records Files To Schools,

Day Care Facilities, Youth Serving

Organizations. As Of 1998, Only 6

States Had Passed A Law.

National Child Protection Act of 1993 (NCPA)


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Amended NCPA To

Allow Volunteer

Organizations

Access To Federal

Criminal Record

Files Whether Or

Not A State Law

Was Passed.

Volunteers for Children Act of 1998 (VCA)


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The Original Pilot Program, Called

Safetynet, Whereby Three Organizations –

National Mentoring Partnerships, Boys &

Girls Clubs Of America And The National

Council Of Youth Sports Were Allowed

Direct Access To FBI Files.

PROTECT Act of 2003

Pilot Program Was Later Extended But

Most Nonprofit Organizations Access

FBI’s Triple I Database Through The

Official State Criminal History

Repository.


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Aka Title VIII Of The Civil Rights Act Of

1868 And Designed Originally To

Protect Consumers From

Discrimination In Housing.

Fair Housing Act of 1968


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Background Screening, Consumer

Reporting, Private Investigation,

Data Access, Data Use And

Consumer Protection Or Privacy

Laws.

State Specific or Industry Specific Laws


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How Do Users of Consumer Reports

Satisfy Their FCRA Obligations?


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What Must Users Of Consumer Reports Do?

Establish A Written Policy/ Procedure

Design Adverse Action Notice Requirements

Have A “Permissible Purpose”

Choose A Quality Screening Provider

Use Proper Consumer Disclosure/Authorization


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What You Need to

Know About

Choosing a

Quality Screening

Provider


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Be An Accredited Member Of

National Association Of

Professional Background

Screeners (NAPBS).

Your Screening Provider Must


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Have FCRA

Certified

Personnel (Basic

Or Advanced).



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Own, Operate, Or Control

Platforms, Technology, Products

And Data – More Than Just A

Sales Office.



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Be Well-versed On Issues

Of Compliance, Products,

Data Availability, Screening

Programs.



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Software Integrations And Technology


Be Recognized And Known As A

Service Provider For:

Screening Best Practices

Databases, Matching Technology, Compliance Filters

Research And Reporting

Federal And State Compliance

Custom Product Mixes And Options


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A Quality Consumer Dispute Process In Place

Insider Tips

Ensure That Your Screening Company Has

Low Record of Litigation (or early resolution of litigation)

Strong History Of Effective Dispute Resolution

Insider TipsInsider Tips


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Evaluating

Your

Obligations

Companies Who Use Consumer Reports Have Specific Obligations To Ensure They Are In Compliance With The Fair Credit Reporting Act (FCRA), As Amended.


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Consumer Disclosure & Authorization

Two Obligations That Will Be Discussed Today

Establishing Your Permissible Purpose


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Establishing Your Permissible Purpose

The Reasons That

You Can Supply Or

Use A Consumer

Report


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The Consumer Report Will Be

Used For Employment

Purposes, Including Hiring And

Promotion Decisions

You Have Established Your Permissible

Purpose If…


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The Consumer Report

Has Been Supplied

With Written

Permission From The

Consumer


Purpose If…


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The Consumer Report

Has Been Issued In

Response To A Valid

Subpoena/Court Order


Purpose If…


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The Consumer Report Has Been

Conducted With Expressed

Permission From An Individual.


Purpose If…


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• Consumer Credit Transaction

• Legitimate Business Need In Consumer Initiated

Transaction

• Insurance Underwriting

• Issuance Of Government Sponsored Travel

Charge Cards

• Government Licensing

• Child Support Agency Or Award Investigation


Purpose If…The Person Utilizing The Report

Uses It For One Of The

Following Reasons:


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Using Proper Disclosure/Authorization


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Your Written Disclosure/Authorization Form

Is Both “Clear And Conspicuous”.

Be Sure That


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Your Disclosure And Authorization

Form Is In One Document

Be Sure That


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Your Disclosure And

Authorization Form Is A “Stand-

alone” And “Separate”

Document (I.E. Separate From

Application)

Be Sure That


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Your Disclosure And Authorization

Form Is Able To Extend For

Duration Of Employment

Be Sure That


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ADVERSE

ACTION


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Be Sure To Know What The FCRA Says About

Adverse Action


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There Are Different

Requirements For

Different

Types Of Consumer

Reports


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The FCRA Is Designed To Protect

Consumers From Inaccurate Or Out-of-

date Information, Identity Theft, And Other

Situations


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Adverse Action Process

There Is A One Step Tenant

Screening Process

There Is A Two Step Process For

Tenant And Volunteer Screening


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Copy Of Report Decision

Summary Of Rights

How To Dispute

Step One In The Employment And Volunteer

Screening Adverse Action Process

Pre-adverse Action Notice


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Notice Of Company

Decision

Screening Firm Address

And Phone

In Tenant Screening Adverse Action

Process

In The Employment And Volunteer

Screening Adverse Action Process

Step One

Step Two

Post-adverse Action Notice

Statement That Firm Did Not

Make Decision

Notice Of Right To Dispute

Within 60 Days And Right To

One (1) Free Annual Copy

Of Report


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Designing Your

Adverse Action

Process


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A Substantive Conversation With

The Consumer

Keys To Designing This Process:

Review Of Any Disputed Items

Individualized Assessment


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Dispose of

Records

Properly


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Take Away Points

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• Understand The FCRA Requirements

• Understand What Qualifies A Background Screening

Program

• How Do You Satisfy FCRA Obligations

• How Do You Choose A Background Screening

Provider

• How Do You Establish Permissible Purpose

• How Do You Design An Adverse Action Program

• How Do You Dispose Of Records


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Coming Up Next…

Using the Right Records in the Right Ways

1.800.600.8999 www.trak-1.com

Contact Nancy Roberts directly or talk with Trak-1’s FCRA

certified screening professionals and begin – Ruling In The

Right People!

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