Adverse Action

PSBI’s Adverse Action workflow helps you stay FCRA-compliant when a background check result might lead you to decline a candidate, terminate an employee, or otherwise take adverse action. The system handles the required notices, waiting period, dispute process, and final notification — all from your client dashboard.

---

What FCRA requires

The Fair Credit Reporting Act (FCRA) requires a two-step process whenever an employer takes adverse action based — even in part — on a consumer report:

1. Pre-Adverse Action Notice. Before you take action, you must give the consumer:

   • A copy of the background check report you’re relying on
   • A copy of the FCRA “Summary of Your Rights”
   • Notice that adverse action is being considered

2. Reasonable waiting period. A reasonable amount of time for the consumer to review the report and dispute anything they believe is inaccurate. PSBI defaults to 7 calendar days, which is widely accepted as reasonable; you can adjust this in your settings.

3. Final Adverse Action Notice. After the waiting period, if you’re still moving forward, you send a final notice that includes:

   • Notice of the adverse action
   • The CRA’s contact information (PSBI’s, in this case)
   • Notice of the consumer’s right to dispute the report’s accuracy
   • Notice of the consumer’s right to a free report copy within 60 days

PSBI generates both notices, delivers them to the consumer, tracks the waiting period, handles disputes, and produces a complete audit trail.

---

The Adverse Action lifecycle

Pre-Adverse Sent  →  Waiting Period  →  Final Adverse Action Sent  →  Completed
                          │
                          ├─ Disputed  →  resumes waiting period
                          │            or cancels the AA
                          └─ Cancelled at any time

1. Initiation

You start an Adverse Action from the Report Review task on a flagged background check. Click Initiate Adverse Action, optionally add a note explaining your reasoning, and confirm.

PSBI immediately:

• Generates the Pre-Adverse Action notice as a PDF (using your branded template)
• Emails the consumer a secure link to view their report and the notice
• Starts the waiting period clock
• Records the action in your audit log

2. Waiting period

During the waiting period, the consumer can:

• Review their full background check report
• Download the Pre-Adverse Action notice
• Submit a dispute if they believe something on the report is inaccurate

You can:

• Track countdown timers from the Adverse Actions dashboard
• Add notes (internal or client-visible)
• Cancel the Adverse Action at any time if you change your mind

If the waiting period ends with no dispute, PSBI automatically advances the Adverse Action to “ready for final notice.”

3. Disputes

If the consumer disputes the report:

• The waiting period is paused automatically
• The PSBI disputes team is notified and investigates
• You’re notified that a dispute is in progress

When the dispute is resolved, one of two things happens:

• Findings confirmed (the report stands as-is) → waiting period resumes for the remaining days, then proceeds to final notice
• Findings modified (the report is corrected) → you decide whether to resume the Adverse Action with the corrected report or cancel it

4. Final Adverse Action notice

Once the waiting period is complete (and any disputes resolved), you send the final notice from your dashboard. PSBI:

• Generates the Final Adverse Action PDF
• Emails it to the consumer
• Marks the Adverse Action as Completed
• Retains the full record and document trail for compliance audit purposes

5. Cancellation

You can cancel an Adverse Action at any point before it’s completed — for example, if you decide to hire the candidate after all. The consumer is notified, and the case is closed without a final notice being sent.

---

What the consumer sees

When you initiate an Adverse Action, the consumer receives a branded email with a secure link. Clicking it requires:

1. Token verification
2. A 6-digit PIN sent to their email

Once verified, they land on a document portal where they can:

• Download the Pre-Adverse Action notice
• View their full background check report
• Submit a dispute with a written explanation and optional file attachments
• Return any time via the same link to check status or download documents

The flow is consumer-friendly, mobile-responsive, and uses the same branding as the rest of your candidate experience.

---

Settings you control

Setting	Default	What it does
Adverse Action emails	On	Whether PSBI auto-emails notices to consumers. Turn off if you deliver notices yourself (e.g. certified mail).
Waiting period	7 calendar days	How long between Pre-Adverse and Final Adverse Action.

Settings are snapshotted at the moment you initiate each Adverse Action, so changing your defaults later won’t affect cases already in progress.

---

Manual delivery

If a consumer doesn’t have an email on file, or your policy requires postal delivery:

1. Download the Pre-Adverse PDF from the dashboard
2. Send it via your preferred method (certified mail, in-person, etc.)
3. Click Confirm Manual Delivery to start the waiting period

The same option exists for the Final Adverse Action notice.

---

Permissions

Permission	Client Admin	Client Basic	Client Limited
View Adverse Actions	✓	✓	✓
Initiate / send / cancel Adverse Actions	✓	✓	—

---

Audit trail

Every Adverse Action records:

• Who initiated it and when
• Which searches triggered it
• All notices generated, with timestamps and PDF copies retained
• All notes (internal and consumer-facing)
• Dispute submissions and resolutions
• Email delivery events
• Status changes throughout the lifecycle

This record is available from the Adverse Action detail page and is retained for compliance auditing.

---

Frequently asked questions

Do I have to use PSBI’s notices, or can I send my own? You can do either. PSBI’s notices are FCRA-compliant out of the box and include all required elements. If you have your own templates, talk to your account team about loading them in.

Can I change the waiting period? Yes. The default is 7 calendar days, which courts have generally accepted as reasonable. Some states or roles may warrant longer — adjust in your client settings.

What if the consumer never opens the email? The waiting period runs from when the notice is sent, not when it’s read. The consumer’s right is to receive the notice; opening it is on them. The audit trail records delivery events.

What counts as “adverse action”? The FCRA’s definition is broad: declining to hire, firing, denying a promotion, denying a contract, or any other decision that adversely affects a consumer based — in whole or in part — on a consumer report. When in doubt, run it through the Adverse Action workflow.

Are individual assessments (IA) supported? Some jurisdictions require a structured individual assessment before final adverse action. PSBI is adding native IA support; in the meantime, you can document your assessment using the notes system on each Adverse Action case.

How long do you retain Adverse Action records? PSBI retains Adverse Action records and generated PDFs for the full audit retention period set by your account. Reach out to your account team if you have specific retention requirements.