The Consumer Financial Protection Bureau (CFPB) recently issued an advisory to confirm that companies that use and share credit reports and background reports have a permissible purpose under the Fair Credit Reporting Act (FCRA).
As most of us are aware, the FCRA ensures fair and accurate reporting, requiring users who purchase these reports to have a legally permissible purpose.
Simply, companies cannot check an individual’s personal information, including their credit history, without a legitimate reason. Common examples of permissible purposes include using consumer reports for decisions regarding credit, housing, or employment.
The new advisory opinion clarifies that both credit reporting companies and users of reports have obligations to protect the public’s privacy. As such, companies must ensure that the person or company requesting the report has a permissible purpose to do so.
They also must take reasonable steps to confirm that the information contained within the report is only about the individual for whom the user has a permissible purpose.
This is only one of the many reasons it is so important to work with companies that are certified or accredited in their field, such as the Professional Background Screening Association (PBSA). As a PBSA-accredited background screening company, Hire Image uses our COMPLY method, taking every step to help ensure FCRA compliance.
Read the Advisory Opinion here.
Have any questions? Hire Image can help. Contact us if you have any concerns about your own background screening practices.