Be Aware – and – Beware!

Many employers believe that a quick and cheap pre-employment background is sufficient to mitigate any liability should an employee commit criminal acts in the workplace. The employer thinks that a background report would be enough of a defense to free them from compensatory or punitive damages. Background reports are not created equal… and their use could be illegal! A bona fide employment screening company (also known as a Credit Reporting Agency or CRA) has both regulatory and legal requirements to follow when providing background screening services for employers. A CRA is regulated by the Fair Credit Reporting Act (FCRA) under the Federal Trade Commission. The FCRA outlines what can and cannot be used on a background report for people applying for a job. Should the employer or the CRA breach any of the rules and regulations outlined by the FCRA, there can be severe consequences, e.g. hefty fines, brand damage, and the like.

Don’t Just Google Search for a Background Vendor

The Internet is awash with websites that offer instant and cheap backgrounds. All one must do is conduct a search on the term, “backgrounds” and page upon page of websites are available for anyone to conduct a search on anyone’s background. The question is, “Would the report be compliant with the FCRA?” The purpose of this paper is to bring an employer’s attention to a very small disclaimer that appears at the bottom of many of the web sites offering background searches. The disclaimer usually reads or is very similar to the following:

Under the Fair Credit Reporting Act, 15 USC 1681 et seq, (”FCRA”), it is unlawful to use our service or the information we provide for any purpose that would require FCRA compliance; this includes, but is not limited to, making decisions about a consumer credit, employment, insurance, or tenant screening. (Name of Web Site) is not a consumer reporting agency as defined by the Fair Credit Reporting Act, we do not provide consumer reports. Since (Name of Web Site) only collects this data and does not create it, we cannot fully guarantee its accuracy.

If a disclaimer starts off with, “it is unlawful…” pay attention!

If an employer sees this disclaimer be aware and beware that the information cannot be used for employment purposes.  It could expose the employer to severe legal consequences should they use the information. A valid background screening company, which are qualified CRA’s, would not label their web site with such a disclaimer. So when an employer seeks to conduct background checks on their applicants for employment, please carefully review the background screening vendor’s website in total before conducting any background. And remember to look for the disclaimer! Here are examples of several popular websites that display the disclaimer:



Instant Checkmate



We would be happy to help you navigate the waters to ensure you are not getting taken advantage of.