In 2016, Florida woman Theresa Jones applied to drive for Lyft, Inc. The rideshare company ran its typical pre-employment screening then immediately barred her from employment because of her criminal record.
However, the record reported in Jones’ screening was not hers. It was that of a different woman with the same name and same date of birth. Lyft’s credit reporting agency pulled these records with a “name-based only search,” which means common names like Jones may show multiple results. The agency did not dig farther into each result’s specific information to find the report that matched the real Jones. Lyft cleared up the confusion by confirming Jones’ identity with her fingerprints, but she still filed a lawsuit against the company.
She claimed the rideshare company took adverse action without giving her a chance to dispute the background check first. This unjustified consequence cost Jones weeks of work and broke compliance with the Fair Credit Reporting Act (FCRA).
In 2019, Lyft rescreened Jones. Again, Lyft’s background check provider presented the wrong criminal record report and Lyft once again suspended her employment. This time, Jones filed a lawsuit against both Lyft and its screening provider. Jones now drives for a Lyft competitor.
Stories like this underscore why FCRA compliance is so important in the background check industry. When screening agencies and the organizations hiring them maintain the standards of the FCRA, all of these problems can be prevented.
Below is a breakdown of the Fair Credit Reporting Act compliance and how to protect your employees, business and reputation.
What is the FCRA?
According to the Federal Trade Commission (FTC), the FCRA “promotes the accuracy, fairness, and privacy of information in the files of consumer reporting agencies” to protect those subjected to background checks.
Under the FCRA, the candidates you screen have several rights throughout the background check process. In order to be compliant with the FCRA, your organization and the background check agency you hire must respect those rights.
Anyone you run a background check on has the right to know everything in their file. If they request access to their report, your consumer reporting agency must provide them with the information they have.
Those you screen also have the right to dispute any part of their background check they believe is incorrect or incomplete. Before you can take adverse action against an applicant, you have to give them the chance to dispute their report.
If the person disputing information in their report provides the Consumer Financial Protection Bureau with enough information to investigate their claim and their dispute is resolved, they have the right to get all the incorrect information erased or changed. Once this process is complete, you can proceed with hiring decisions.
How can I make sure my organization complies with the FCRA?
The most important and simplest thing any organization can do to stay complaint with the FCRA is ensure everyone gives written consent to a screening. No background check agency can give you any information without certainty that the subject is fully aware of the check. Including a consent form early in your application process is an easy way to secure compliance.
Once you have an applicant’s report, you must immediately notify them if you want to take adverse action against them. You need to explain what specific information in their report led you to your decision so they can see if the report is accurate.
In the case of Lyft, they were taken to court for notifying Jones that they had already taken adverse action without giving her any opportunity to correct her report. Following the FCRA can help you avoid this.
To learn more about the FCRA or One Source’s FCRA compliance practices, contact One Source Client Relations.