Well, let’s thank the federal government for making the language surrounding employment background checks so confusing. No, you are not alone. When I launched Safe Hiring Solutions in 2004 I had visions of a company like Charlie’s Angels (some of you are too young to even understand the reference). We would be a sleek organization with armed investigators hiding behind trees and peeking in windows to ensure your applicants were qualified. What I quickly learned is the federal government does not view employment background screening as anything close to Charlie’s Angels. So I put away my gun and leisure suit and read the federal Fair Credit Reporting Act. What I quickly discovered was the language is complicated and confusing. So we will dissect the FCRA in multiple blog posts and FREE webinars.
Today, we need to lay the foundation by explaining some of the key definitions under the FCRA. First, the federal law defines background screening firms like Safe Hiring Solutions as a Consumer Reporting Agency (CRA) because we assemble information on consumers for a fee.
So when an organization becomes a client of a background screening firm their employee background checks are defined under the federal Fair Credit Reporting Act as Consumer Reports or Investigative Consumer Reports. Here are the definitions of each:
Consumer Report: Applicants immediately think this is a credit report but a consumer report is much broader in scope than a credit report. A consumer report is a report prepared by a CRA that includes information on an applicant’s or employee’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics or mode of living and is used or expected to be used for employment purposes. A consumer report could be:
- Criminal records
- Civil records
- Driving records
- Civil lawsuits
- Education verifications
- Employment verifications
Investigative Consumer Report: An investigative consumer report is a special type of consumer report that is gathered from personal interviews of neighbors, friends, associates, or current and past employers that may have information bearing on the applicant’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics or mode of living and is used or expected to be used for employment purposes. So an Investigative Consumer Report is NOT a criminal background check but could be:
- Personal reference checks
- Professional reference checks
It is important for you to understand the definitions because the FCRA has very specific requirements of employers that use Consumer and Investigative Consumer Reports.
Join Mike McCarty and attorney Steve Koers on May 3, 2011 at 2PM EST for a FREE Webinar on Understanding the FCRA & Legally Defensible Background Checks
What do you think the FCRA means by “mode of living”? Leave us a comment below.