Employment
Screening: CORI and
Private Background
Checks
Presented by the
Massachusetts Law Reform Institute
99 Chauncy St., Suite 500, Boston, MA 02111
617-357-0700
www.mlri.org
The Fair Credit Reporting Act
• Fair Credit Reporting Act (FCRA), 15 U.S.C.
§ § 1681 et seq.
• Enforced by the Federal Trade Commission,
state Attorney General. Many provisions can
be enforced by private litigants
• Regulates employment background checks
and other types of background checks
(“consumer reports”) by private companies
(or “consumer reporting agencies”)
Some definitions…
• What is a “consumer report’?
• What is a “consumer reporting agency”?
Consumer Report
• “Consumer report” is the name of the background check
document. A consumer report includes more information
than traditional credit reports.
• A consumer report is a document containing information
that bears on a consumer's creditworthiness, credit
standing, credit capacity, character, general reputation,
personal characteristics, or mode of living
• Under the FCRA, these reports may be used to establish
the consumer's or applicant’s eligibility for:
– credit or insurance to be used primarily for personal, family, or
household purposes;
– employment; or
– other purposes allowed by the FCRA (snooping is not allowed)
Consumer Report, continued
• The consumer report may include arrest information,
criminal records from other states, aliases, employment
termination reports, and addresses and phone numbers
used by the applicant.
• The report must also contain a summary of the rights
that the report’s subject may exercise, under the FCRA
• Consumer reports must exclude most adverse
information which is more 7 years old. Arrest records
must be excluded if more than 7 years old.
• Exceptions:
– Criminal convictions can be included, no matter how old
– Bankruptcies which are less than 10 years old may be included
– Any negative information can be included if the employee will
earn $75,000 per year or more
INVESTIGATIVE CONSUMER
REPORTS
• INVESTIGATIVE REPORTS: Employers may
have investigators interview people who know
the applicant, to collect information about
behavior, lifestyle, etc. Consumer must be
notified first and information must be verified.
• EXCEPTION: Protections do not apply to
employee misconduct investigation reports ( if
report is only provided to employer, government
agency, or regulatory organization).
CORI Report . . . or Consumer Report?
• Massachusetts only
• Contains criminal charges filed
in Mass. Courts
• Employer must apply to the
CHSB to be certified to receive
CORI
• One or more states, and can
be nationwide
• Available from private
companies such as
ChoicePoint, Equifax,
Experian, etc. (credit reporting
agencies)
• In addition to criminal charges,
may include arrests that did
not lead to any charges, traffic
violations, financial
information, and other
information
• The employer (or “user”) who
buys the report must use it for
legal or permissible purposes
Sample
CORI Report
Sample
Consumer
Report
Sample
Consumer
Report
page 2
Sample
Consumer
Report
page 3
Sample
Consumer
Report
page 4
Consumer Reporting Agency
(CRA)
Any entity which:
• “for monetary fees, dues, or on a
cooperative nonprofit basis”
• “regularly engages in . . . assembling or
evaluating consumer credit information or
other information on consumers”
• “for the purpose of furnishing consumer
reports to third parties”
15 U.S.C. §1681a(f)
The “Big Three” major nationwide
CRA’s:
Equifax
1-800-525-6285
Experian
1-888-EXPERIAN (397-3742)
TransUnion
1-800-680-7289
Another big CRA and provider of employment reports:
ChoicePoint
1-888-497-0011
CHSB . . . or CRA?
• Massachusetts state
agency
• Governing statute at
M.G.L. c. 6, §§168 et seq.
• State statutes and
regulations set limits on
access to CORI and give
the CORI subject some
legal protections (e.g.,
due process rights, law
prohibiting unlawful
disclosure)
• Private companies
• Regulated by federal law,
mainly the FCRA
• Some state laws may
also apply (in
Massachusetts, some
sections of M.G.L. c. 93),
but most are pre-empted
by federal law
Rights and Responsibilities under
the FCRA
• Users of Consumer Reports (e.g., employers,
landlords)
• Consumer Reporting Agencies
• Furnishers of information (e.g., courts and other
sources of criminal record information,
employers)
• Consumers – job applicants, employees, or
other subjects of consumer reports
Users of consumer reports – duties
under the FCRA
Generally:
• Employers and other users must get
written permission from the individual
before ordering a report. Blanket
authorizations which don’t expire are
allowed.
• The report must be used only for purposes
permitted under the FCRA (which include
employment screening).
Users of consumer reports – duties
under the FCRA
If taking adverse action based on the report, the employer or other user
must:
•
Notify the subject of the report of the adverse action
•
Provide the contact information for the consumer reporting agency,
while explaining that the consumer reporting agency did not make
the decision to deny the individual’s application
•
Let the individual know that he or she has a right to dispute the
information in the report, and to get a free copy of the report within
the next 60 days
•
Employers must provide a copy of the report that the adverse action
was based upon.
Users of consumer reports – duties
under the FCRA
Employers must certify that:
• the employer disclosed that he or she would
seek a consumer report,
• the employee or applicant gave written
permission for the employer to purchase the
report,
• the report will not be used in violation of any
equal employment opportunity laws, and
• the employee or applicant has been given a
summary of his or her rights under the FCRA
Consumer Reporting Agencies –
duties under the FCRA
If a report is being created for employment screening
purposes, and public record information included in the
report is likely to harm the applicant’s prospects of being
hired, then the consumer reporting agency must do either
of the following:
– Notify the applicant that the potentially damaging public record
information is being released, and to whom,
or
– Maintain “strict procedures” to insure that the public record
information is accurate and up to date. The information is
considered to be up to date if the report includes a note about
the current status of the information at the time the report was
generated.
Consumer Rights –
Access to Consumer Reports
• Under the FCRA, free copy of the individual’s own consumer report:
–
–
–
–
–
–
–
Once per year (for everyone), plus
When an adverse action is taken
When the consumer is the victim of identity theft
If the file contains inaccurate information due to fraud
If the consumer is receiving public assistance
If the consumer is unemployed and plans to apply for a job within the next 60 days
Free reports from the big three nationwide bureaus can be ordered at
www.AnnualCreditReport.com. For all other CRA’s, free reports should be ordered
by contacting the CRA directly
• Massachusetts law:
– One free report per year
– Additional reports available for $8 or less
– CRA must also provide someone to help the consumer interpret the information in
the credit file
Consumer Rights Under the FCRA
• Consumers are entitled to a list of all employers
and others who requested a consumer report for
employment purposes in the last 2 years, or
within the past year for other purposes
• Consumers who are victims of identity theft may
place a “fraud alert” in the files kept by the big
three CRA’s (to keep thieves from opening
fraudulent accounts)
• Consumers have a right to dispute inaccurate
information in their reports
Consumer’s Right to Dispute
Inaccurate Information
•
Consumer notifies consumer reporting agency of the dispute, in writing.
•
The consumer reporting agency must investigate and resolve the complaint
within 30 days (15-day extension may be available). The investigation must
involve the furnisher of information. The furnisher has its own obligations to
conduct an investigation. The disputed information must be corrected or
removed within that time, if it cannot be verified by the consumer reporting
agency.
•
Consumer may ask the consumer reporting agency to tell the employer that
the disputed information has been removed.
•
Only a dispute sent to the CRA gives rise to a cause of action if a
reasonable investigation is not conducted. If the employee or consumer
sends a dispute directly to a furnisher of information, then there is no private
remedy for failure to investigate the dispute.
Disputing the accuracy of
information at its source
• Furnishers may only report information that they know is accurate or
have reasonable cause to believe is accurate.
• If the furnisher finds the information is inaccurate, the furnisher must
notify the CRA and provide the accurate information.
• In a dispute with a furnisher, the consumer may notify the furnisher
of the erroneous information that it is inaccurate or incomplete, and
the furnisher must include a notice of the dispute with any future
disclosures of the information to CRAs.
• There is no private right of action against furnishers except for
failure to investigate a dispute sent to a CRA.
• Do state agencies have liability as furnishers under the FCRA? The
Eleventh Amendment may be a bar to liability.
If dispute is not resolved to the
consumer’s satisfaction . . .
• If dispute with a CRA is not resolved, the
consumer may write a statement that must
be included in the file for future reports.
• A furnisher must also include a notice of a
dispute with any future disclosures of the
information to CRAs, as noted previously.
Further remedies for consumers
• Consumers may file civil suit in federal court for certain
violations of the FCRA. To find a private attorney who
handles FCRA cases: www.naca.net
• The Federal Trade Commission (FTC) or state attorney
general may seek civil or criminal penalties for violations
of the FCRA.
• Consumers can file complaints with the FTC at
www.ftc.gov. The agency may investigate and refer the
consumer, but the FTC does not resolve individual
consumer complaints.
• Additional information available in the book Fair Credit
Reporting, by the National Consumer Law Center.
• Massachusetts Law Reform Institute, www.mlri.org.