What do you do once a year?
Celebrate your birthday. Welcome in the New Year. Maybe you take a vacation. Some may clean out a garage once a year. Have the furnace serviced. Have you considered doing an annual review of your Adverse Action documents? It might be a good idea, especially if you are not utilizing our service for this function today. We are often surprised when we onboard accounts, and we encounter documents that are non-compliant for Adverse Action. It is one of the areas that lawyers look for to create class-action suits. Reduce your risk and be knowledgeable about Adverse Action.
Employers have legal responsibilities under the Fair Credit Reporting Act (FCRA), Sections 604(b)(3) and 615, regarding adverse action. Whenever a company decides it may take an action that adversely affects the consumer, and that decision is based in whole or in part on the information contained in the consumer (background screening) report, the FCRA requires specific notices be provided to the consumer. An adverse action can include, but is not limited to, deciding not to hire, retain, or promote an applicant or current employee.
Before taking adverse action
Before taking adverse action, the employer should first send a preliminary adverse action notification which advises the consumer that there is information in the consumer report which, if accurate, may prevent the company from hiring, retaining, or promoting them. The notification should include (1) a copy of the Report, (2) a description, in writing, of the rights of the consumer entitled “A Summary of Your Rights Under the Fair Credit Reporting Act,” and (3) a written notice containing all required notifications under federal, state, or local law.
The employer will then wait a reasonable amount of time, which allows the consumer time to review their consumer report and, if necessary, dispute any potentially inaccurate information with the consumer reporting agency. The FCRA statute does not specify an amount of time, but employers should consider any adverse action procedures specified by state and/or local law.
After the appropriate waiting period and, assuming the consumer did not dispute the information in the report, the employer will issue to the consumer notice of any adverse action taken. The notification should include : (1) the name, address, and telephone number of the consumer report agency, (2) a statement that the consumer reporting agency did not make the decision to take the adverse action and it is unable to provide the Consumer the specific reasons why the adverse action was taken, (3) a statement that the Consumer may obtain a free copy of the consumer report from the consumer reporting agency within 60 days pursuant to Section 612 of the Fair Credit Reporting Act, and (4) a statement that the Consumer has the right to dispute with the consumer reporting agency the accuracy or completeness of any information in the consumer report.
One of the services offered by Edge is the administration of adverse action on a per-applicant basis. Please note this service is only available for new hires. The Adverse Action service includes the preparation and mailing of both letters based on your decision and includes the required copy of the consumer report and FCRA Summary of Rights document along with any other state-specific requirements. Utilizing Edge for adverse action administrative services may help lower your adverse action requirement risks. Please contact our Client Services Department at clientservices@edgeinformation.com or 888-643-5716 if you are interested in this service.
While the information may address legal issues, it is not intended as legal advice or as a substitute for the particularized advice of your own counsel. Edge does not function as legal counsel and entities seeking legal advice or assistance on their overall screening program should contact an attorney.
