What You Need To Know About the FCRA

ANNUAL UNITED STATES AND GLOBAL

FAIR CREDIT REPORTING ACT (FCRA) TRAINING

2024-2025

MODULE 1

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Welcome!

Training purpose and scope

First Advantage Global Compliance is pleased to share
the 2024-2025 Annual Fair Credit Reporting Act (FCRA)
Training
This Training:
• Is mandatory for all new hires and employees of First Advantage that may support
Fair Credit Reporting Act (FCRA) related employment or resident/tenant background
screening compliance globally in their daily work.

• Is applicable to all First Advantage locations, in the United States and across the rest
of the globe, that support FCRA background screening or may conduct a background
screen on a US candidate.

• Applies to home-based/remote workers, contingent workers, and contract labor that

may support our background screening products that screen US consumers (also
known as data subjects).

• Is designed to help you understand the FCRA and why First Advantage and its team
members across the globe must comply with its requirements.
What This Training Covers

• Module 1: The basics: What is the Fair Credit Reporting

Act (FCRA)?

• Module 2: What are First Advantage’s obligations as a

Consumer Reporting Agency (CRA), and what does this
mean for you?

• Module 3: Risks of non-compliance with the FCRA to First

Advantage and how can you help support compliance.
Purpose of This Training
The purpose of this training is to help you understand:
• The strict and critically important requirements of FCRA compliance,
• First Advantage’s obligations under the FCRA,
• US state law related matters, and
• the risks of non-compliance with the FCRA’s requirements.

But why are you being asked to take this training?

Because the FCRA is the legal authority for all US Background Screening all
team members that support US Background Screening must understand its
requirements.

Look for the globe icon as you move through the training. It
identifies important information.
Introduction:

What is Compliance?
 Compliance

Defined:
• Act or process of complying to a desire, demand
or proposal, or to coercion
• Conformity in fulfilling official requirements
• A disposition to yield to others
• Compliant ready or disposed to comply: Submissive

Interesting Fact:
• The term Compliance is used as if it is a legal term, but it is not even in Black’s Law
Dictionary! It is; however, critically important to legal risk reduction

First Advantage is required to comply with the FCRA and related US State
Laws. FCRA requirements apply when conducting a background screen
on US residents located within and outside of the United States.
WHY IS GLOBAL COMPLIANCE IMPORTANT

Audit Reputation
Protection Compliance
Risk
Cost Savings Protection
Satisfaction
 Module 1: What is the Fair Credit
Reporting Act (FCRA)?
The Basics

• What does FCRA compliance mean for you in your daily

work?
Module 1: Training Objectives

• What is the Fair Credit Reporting Act (FCRA)

• Purpose of the FCRA
• History of the FCRA
• How the FCRA applies to certain organizations and entities
• Foundation information that will help you begin to navigate
through the terms and requirements of the FCRA
 What is the Fair Credit Reporting Act?

The Fair Credit Reporting Act (FCRA) is a United States federal law that
regulates the collection and use of a candidates or employee’s information
when a Consumer Reporting Agency (CRA) conducts employment or
tenant/resident/housing-related background screening on an individual
(known as a consumer in the US and as a data subject, or by similar
descriptor, outside the United States) on behalf of an employer or landlord.

United States Code Title 15. Commerce and Trade Chapter 41. Consumer Credit Protection Subchapter III.
Credit Reporting Agencies 15 U.S.C. Section 1681 et seq. Also referenced as Section 601.- Section 629. by
Industry shorthand.
What is the FCRA? (Cont.)

• The FCRA gives people the right to see their credit records from credit
reporting bureaus and to correct their report in certain circumstances.
• While the FCRA regulates the disclosure of personal information, it
does not restrict the amount or type of information that can be
collected. It does; however, limit the reporting of out-of-date
information.

• Under the FCRA, consumer reporting agencies may only disclose

personal information to third parties (ex. First Advantage customers)
under specified conditions.
• Written consent of the subject of the report is required, and
• The requesting party intends to use the information for one of the
following allowable reasons:
o For a credit, employment or insurance evaluation;
o In connection with the grant of a license or other government benefit;
or
o For another legitimate business need involving the consumer.
Understanding the FCRA Numbering
• US federal laws are organized in Titles, or general sections, in a book of
laws called the United States Code.

• Generally, these federal laws are referred to by the Code’s Title. For
example, Title 15 and Section 1681 for the FCRA.

• But – although the foregoing is the legal numbering used officially, such
as in litigation, the FCRA is a bit different because there is a second
numbering system in common in common use by the Background
Screening Industry!

• The unofficial/Industry used numbering system is also published as an

accepted working version of the FCRA as published by the Fair Trade
Commission (FTC) as a public service.

LINK:
https://bja.ojp.gov/program/it/privacy-civil-
liberties/authorities/statutes/2349#:~:text=The%20Fair%20Credit%20Rep
orting%20Act,Credit%20Reporting%20Agencies%20(CRAs).

United States Code Title 15. Commerce and Trade Chapter 41. Consumer Credit Protection
Subchapter III. Credit Reporting Agencies 15 U.S.C. Section 1681 et seq. Also referenced as
Section 601.- Section 629. by Industry shorthand.
 What is the Purpose of the FCRA?

The purpose of the FCRA is to protect consumers who are the

subject of a background screen by:

1. Making sure that the information reported is accurate and

reliable,
2. Providing the consumer with an opportunity to
challenge/dispute the report, and
3. Restricting what information may be reported.
 History of the FCRA
• The FCRA became law in 1970.

• It was originally intended to regulate credit reporting agencies, as provided in

the law’s Congressional findings and statement of purpose:

 (1) The banking system is dependent upon fair and accurate credit
reporting. Inaccurate credit reports directly impair the efficiency of the
banking system, and unfair credit reporting methods undermine the
public confidence which is essential to the continued functioning of the
banking system. Section 602 (a) (1) [15 U.S.C. Section 1681]

• Amendments were made to the FCRA in 1996.

 History (Cont.)

• The Fair and Accurate Credit Transactions Act of 2003 (FACTA)

Amendments added significant additional protections to the FCRA.
FACTA was designed to reduce identity theft by:
• Allowing consumers to request a free file disclosure report once every 12
months from each of the three nationwide consumer credit reporting
companies (Equifax, Experian and TransUnion), as well as from nationwide
specialty consumer reporting agencies, such as First Advantage.

• Allowing consumers to place alerts on their credit histories if they suspect

their identity has been stolen or if they are deployed overseas in the military.
These alerts make it more difficult for an imposter to pass a fraudulent credit
application.

• Providing victims of identity theft the right to obtain copies of an imposter's

account application and transactions from the business that provided the
credit, products, or services to the imposter.

The FCRA was amended in 2008, and again in 2010 as part of the
Consumer Financial Protection Act of 2010 (CFPA).
 History (Cont.)

BUT, the FCRA has been interpreted to cover much more!

The FCRA applies to Consumer Reports. A consumer report means:

“…any written, oral, or other communication of a consumer reporting agency

bearing on a consumer’s credit worthiness, credit standing, credit capacity,
character, general reputation, personal characteristics, or mode of living which
is used or expected to be used or collected in whole or in part for the purpose
of serving as a factor in establishing the consumer’s eligibility for:
• credit or insurance to be used primarily for personal, family, or household purposes
• employment purposes
• any other purpose authorized under Section 604” (permissible purpose – to be
discussed in the Module Two)

Section 603 (d) (1) (A) (B) (C ) [15 U.S.C. Section 1681 a]
INDUSTRY PLAYERS: AN OVERVIEW
Furnishers Resellers
Banks, etc. Credit Bureau Data
Provide data to Examples:
Credit Bureaus Experian, Equifax,
CRAs TransUnion
“considered a person
under the FCRA”
First Advantage
Also referenced as a
Reseller by the Credit
Bureaus

End Users
Public Records First Advantage
Examples: Customers
Court Records
Sex Offender Consumers
Registries Individuals - those
CRA conducting
background screening
on for customer end
user

18
What is A Consumer Reporting Agency?

Under the FCRA, a Consumer Reporting Agency (CRA) is any person

which engages:
• For monetary fees, dues, or on a cooperative nonprofit basis
• Regularly or in whole or in part in the practice of
• Assembling or evaluating consumer credit information or other
information on consumers for the purpose of furnishing consumer
reports to third parties.

Section 603 (d) (3) (f) 15 U.S.C. Section 1681 (a)

This training focuses on the compliance obligations of CRAs.

First Advantage is a CRA under the FCRA, because “person” means
any individual, partnership, corporation, trust, estate, cooperative,
association, government or governmental subdivision or agency, or
any other entity.
Section 603 (b) 15 U.S.C. Section 1681 (a)
More on What A “person” Means Under the FCRA

In addition to CRAs, like First Advantage, the FCRA includes

additional organizations and entities to fall under the
definition of a “person.” These include:
• Furnishers of information,
• End-Users,
• Resellers, and
• Individuals who are the subject of the consumer reports.
• Called consumers in the US and data subjects, or by a similar descriptor,
outside the US
Furnishers of Information
Under the FCRA, Furnishers:
• Provide information regularly and in the course of business, or
occasionally.
• An example of a furnisher that provides information regularly is a
bank.
• An example of a furnisher that provides information occasionally is
a landlord that confirms a tenant paid his or her rent on time.
• Have a duty to avoid providing inaccurate information.
Incomplete, inaccurate and/or disputed information:
• If the furnisher provides information regularly in the course of their business,
they also have a duty to correct incomplete or inaccurate information when
they become aware of the inaccuracy. They must also inform any CRA using the
information of the inaccuracy.

• If a consumer disputes the accuracy of certain information and adds a statement

to his or her report, furnishers must inform the CRA that the information is in
dispute when providing it.

• If adverse action has been taken against a consumer in whole or in part, a CRA
also has notification-related obligations to furnishers under Section 607 (d) (1)
(A) (2) Notice to Users and Furnishers of Information.
 End-Users

Under the FCRA, for the purposes of this training, End-Users

are:
• Individuals or entities that buy consumer reports to use for business or
employment purposes.
• A customer of First Advantage that purchases employment or resident
screening reports.
Resellers
Under the FCRA, Resellers:
• Obtain consumer reports from other sources and pass the
information onto other end-users or other resellers.
• May assemble and merge information from the databases of
one or more CRAs, but they cannot maintain their own
databases of consumer credit information from which new
consumer reports may be produced.
• The scope of their activities may be a little different from what
is generally considered a CRA

The term reseller is also used in another context within the

Background Screening Industry. Specifically, CRAs like First
Advantage are also referenced as resellers by the data sources
from whom they purchase information for background screening.
Examples of entities that reference CRAs as Resellers are the
three major credit bureaus, Equifax, Experian and TransUnion.
 Who is A Consumer?

Under the FCRA, a “Consumer” means an individual.

Section 603 (b) 15 U.S.C. Section 1681 (a)

Note:
Outside of the United States, a consumer may be referred to as a “data subject”
or by a similar descriptor.
Reports Compiled by a CRA: Consumer Reports &
Investigative Consumer Reports

A consumer report is written, oral or other communications of a consumer reporting

agency, which bear upon a consumer’s:
- credit worthiness,
- credit standing,
- credit capacity,
- general reputation,
- personal characteristics,
- or mode of living
which are used or expected to be used as a factor in establishing eligibility for
employment purposes, for obtaining housing, credit, or a loan. These reports may
include credit, driving, criminal history records, etc.
Section 603 (d) 15 U.S.C. Section 1681 (a)

An investigative consumer report is a consumer report, or portion thereof, in which

information on a consumer’s character, general reputation, personal characteristics or
mode of living obtained through personal interviews with neighbors, friends or
associates of the consumer or acquaintances of the consumer.
Section 603 (3) (e) 15 U.S.C. Section 1681 (a)
What is Excluded from FCRA Compliance?

The provision of applicant/employee information to an

employer, which would otherwise be considered a
consumer report, is excluded from the definition of a
consumer report if the communication is made in
connection with the investigation of compliance with
Federal, State, or local laws and regulations.
FCRA Section 603 (y) - Exclusion of certain Communications for Employee
Investigation

Examples include FBI Fingerprinting and Workplace Drug

Testing.
Section 603 (y) 15 U.S.C. Section 1681 (a)
Module 1: Content Reviewed
We reviewed:

• What the Fair Credit Reporting Act (FCRA) is.

• The purpose of the FCRA.
• The history of the FCRA.
• To which organizations and entities, the FCRA applies.
• Foundation information that should help you begin to navigate through the
terms and requirements of the FCRA.

Don’t forget that the globe icon means that the information was
important and worthy of your attention and recollection. The globe icon will
continue to be used throughout the rest of this training program to attract
your attention.
 Thank you for completing
2024-2025
FCRA Training

Module 1
• Questions?
Contact:
Josephine Elizabeth Kenney, J.D. MBA-HR
Chief Global Compliance Officer
[email protected]

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