FACT Act Amendments to the FCRA

FACT Act Amendments to the FCRA

The Fair and Accurate Credit Transactions Act (FACT) was established in 2003 as an amendment to the FCRA. The act is meant to reduce identity theft, increase credit reporting accuracy, and establish safety standards. The act affected employment background screening by requiring employers to give applicants a copy of the “Summary of Your Rights Under the FCRA” before ordering background checks on them. Although an employer can change formatting such as font or layout, the rest of the document must remain unaltered. A reputable background screening company, such as agoodemployee.com  can provide an updated version of the copy to employer clients.

The “Summary of Your Rights Under the FCRA” explains the rights of applicants to remedy issues in their report caused by fraud or identity theft. In a section entitled “Remedying the Effects of Identity Theft” consumers are given the opportunity to:

1) Ask any nationwide credit bureau place fraud alerts on their file: Upon providing proof of identity to a credit bureau, you can set a fraud alert to prevent identity theft. If you have a fraud alert, any business that is asked to extend credit must contact you to assure you they are no an identity thief.

2) Obtain a free copy of their file from any of three nationwide credit bureaus: Before the FACT act consumers usually had to pay up to $9.50 to obtain a copy of their credit report. To encourage self-monitoring, Congress adopted a rule to allow one free copy from TransUnion, Equifax, and Experian. To get your free report from all three bureaus, you can visit www.annualcreditreport.com.

3) Request that a consumer reporting agency block incorrect or fraudulent information from their file that occurred due to identity theft.

In addition, if a current employee is suspected of misconduct or violation of the law or employer policies, the employer has the right to run a background check without providing a disclosure or obtaining consent. However for all other employment purposes, employers need to strictly adhere to the FCRA, FACT, EEOC, and local state legislation. Read more about FACT here.