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FDIC submits testimony on use of consumer reports in employment

The FDIC recently submitted written testimony to the U.S. Commission on Civil Rights regarding the Fair Credit Reporting Act and the use of consumer reports in employment.

The accuracy, fairness and privacy of information in consumer reporting agencies’ files is promoted by the Fair Credit Reporting Act. The FTC’s testimony describes the legal rights and obligations prescribed by the FCRA if consumer reports are used for employment purposes.

Reasonable procedures to assure maximum possible accuracy of reports by CRAs are required under the FCRA, and CRAs are required to notify employers of their obligations under the FCRA.

Employers must obtain written consent from applicants and employees before using consumer reports for employment purposes and provide notice to applicants and employees, as well as a summary of the rights granted by the FCRA, before any adverse action is taken beaded on a consumer report.

Additionally, consumers are given the right to obtain a copy of their consumer report and dispute erroneous or incomplete information with the CRA.

The commission voted 5-0 to approved the testimony.

The FTC has taken action recently against two companies – HireRight Solutions, Inc., and Spokeo, Inc. – that either provided inaccurate information or that failed to take reasonable steps to ensure that the reports it sold would be used only for purposes allowed by law and ensure the reports were accurate, respectively.