FCRA: The Background Check

Background Check
It's an issue that should be of concern to everyone, considering how common background checks are.

May 18, 2022 –Hispanic Solutions Group

The Consumer Financial Protection Bureau recently issued an advisory opinion that reaffirmed its position that when consumer reporting agencies (CRAs) rely on name-only matching procedures, this is a violation of 15 USC § 1681e of the FCRA. . This advisory opinion is considered an interpretive rule. It is effective as of November 10, 2021, when it was published in the Federal Register.

It’s an issue that should be of concern to everyone, considering how common background checks are, but especially to anyone planning to apply for a job or trying to rent an apartment. The Consumer Financial Protection Bureau discussed in its option the problems that inaccurate reports have caused consumers.

According to the view, by name matching alone, a consumer reporting agency uses a first and last name when deciding whether or not the information it has found applies to a particular person. They do not use other personally identifiable information in conjunction with the name, such as social security number, address, or date of birth. The Consumer Financial Protection Bureau (CFPB) emphasized the significant risk of matching information with the wrong person when using data matching.

name only, especially if the consumer reporting agency does not check the information against a variety of sources and relies solely on the public record. This is particularly a problem for minority communities, as there is less diversity in surnames, which increases the risk of error.

It reads: Beginning July 1, 2017, any public record information that CRAs across the country intend to use as part of a credit report must include a name, an address, and a date of birth or social Security number. Many CRAs no longer do name-only background checks, but there are some CRAs that still do. That is why the Board issued the advisory opinion. The office wanted to make it clear that the FCRA requires CRAs to use reasonable methods to ensure that the data used is as accurate as possible. The bureau also stated that name-only matching on background checks is not accurate enough to satisfy the FCRA.

In addition, the bureau attempted to help consumers by emphasizing that CRAs must use reasonable procedures to ensure that consumer background checks are accurate for the intended person. The bureau also stated that data about a person other than the person reported in the background check serves no purpose and violates the FCRA, as they should have a permissible purpose.

Finally. –There are several high-quality background check providers you can choose from to perform a background check. When you run a background check, it’s easy to check the information on the report and make sure it’s accurate.

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