Best Practices for Implementing Background Checks - FCRA Compliance Notice & Template Documents

To help your organization follow best practices in line with the Fair Credit Reporting Act (FCRA) and relevant state and local regulations, we suggest considering these recommended steps when onboarding background screening processes. This guide provides a framework to assist you in managing and organizing applicant information securely and responsibly.

A foundational step for responsible background screening is to obtain the applicant’s written consent before conducting a background check. Provide a clear, standalone disclosure (separate from the job application) to inform the applicant that a background check may be part of the hiring process.

  • It's required, by the FCRA as well as PreSearch, that you always Obtain the applicant’s written consent to perform a background check. Provide a clear, standalone disclosure (separate from the job application) notifying the applicant that a background check may be conducted.
  • Please see our template Notification and Release Authorization form, which complies with the Federal Trade Commission (FTC) guidelines.

Step 2: Provide a Summary of Rights

  • During the application process, it’s recommended to give each applicant a copy of the “Summary of Your Rights Under the FCRA” during the application process. This document helps inform the applicant of their rights with regard to the background check.

Step 3: Pre-Adverse Action Notice

  • Before taking ANY negative employment action based on a background check, provide the applicant with:
    1. A Pre-Adverse Action Notice, informing them of the potential action.
    2. A copy of the consumer report (e.g., background check report).
    3. Another copy of the “Summary of Rights Under the FCRA”.
      PROVIDE (if/on this step)
      1. A pre-adverse action notice (you may use/modify our Pre-Adverse Action Notice)
      2. Another copy of the “Summary of Rights Under the FCRA” (even though this has previously been supplied).
  • This gives the applicant an opportunity to review and dispute any inaccurate or incomplete information. Allow a reasonable amount of time (typically 5-10 days) for the applicant to respond before moving to the next step.

Step 4: Post-Adverse Action Notice

  • If a final decision is made to deny employment based on the background check, send the applicant a Post-Adverse Action Notice, which must include:
    1. The name, address, and contact information of the consumer reporting agency that provided the report.
    2. A statement that the consumer reporting agency did not make the hiring decision and cannot explain why the decision was made.
    3. Information on the applicant’s right to obtain a free copy of their report and dispute any inaccuracies within 60 days.

      PROVIDE (if/on this step)
      1. A pre-adverse action notice (you may use/modify our Adverse Action Notice)
      2. Another copy of the “Summary of Rights Under the FCRA” (even though this has previously been supplied with the Pre-Adverse Action Notice).

Additional FCRA Compliance Steps (For Investigative Consumer Reports)

If a background check includes employment performance information (an Investigative Consumer Report), follow these additional steps:

  • Disclose to the applicant that an investigative report is being requested (our template form covers this by default).
  • Inform the applicant of their right to request more information about the nature of the investigation.
  • If requested, provide additional details within 5 days, along with the “Summary of Rights Under the FCRA”.