CFPB guidance targets cases of mistaken identity during background screening.
Meet Michael Jones. He wants a job as a youth minister, high school basketball coach, or janitor at a daycare facility.
If you’re Michael’s potential employer, you know that you need to perform a background check to ensure the safety of the children in your building.
But there’s a problem – and it’s not that Michael Jones is hiding something from you.
Michael Jones is a common name. Maybe it’s not as common as John Smith, but how many Michael Jones’ could show up in a background check? Plus, all of these Michael Jones’ have legal protections.
If you deny one of them employment because of a screening violation, you could face penalties. You need to screen each and every applicant, of course, but you need to do so in a way that follows the rules.
Background Screening Guidance
So, who makes these rules – and what, specifically, are they? For that matter, does your background check company know what the rules are and how they keep changing?
You’ve probably heard of the Federal Trade Commission (FTC), and maybe you already know that the FTC is a rule-maker in this area. But did you know that the Consumer Financial Protection Bureau (CFPB) also has an important role to play?
That’s right. The same agency that protects consumers from unscrupulous lenders also has a say about what’s fair when potential employers perform background checks.
That’s because background screeners are considered to be consumer reporting agencies (CRA) – just like Equifax, TransUnion, and Experian. In other words, ignoring CFPB guidance could mean trouble under the Fair Credit Reporting Act (FCRA).
