|
 Important
Notice:
Before you can order a consumer report
from NAPS, FCRA mandated compliance procedures must to be taken
by the (End User) to gain access to consumer
reports.
Step 1. Certify
to NAPS, Inc.
The “End User” must certify in writing to NAPS
your permissible purpose for the use of consumer
reports. The “End User” must also certify that you
will comply with: (i) the FCRA requirements of
providing a written disclosure and obtaining a
written authorization from the applicant; (ii) all
pre-adverse and adverse action procedures; and (iii)
not using the consumer report in violation of any
equal opportunity laws or any other laws. For
more information on certification
click here (PDF).
Step 2. Provide
Disclosure to Applicant
Provide a clear and conspicuous disclosure in
writing to the applicant in a “document
that consists solely of the disclosure”,
stating that a consumer report may be obtained for
tenant or employment purposes. This disclosure must
be in a separate document and cannot contain any
additional information except for the consumer's
authorization. Please note
that the Disclosure cannot be made a part of any
other form including the tenant or employment
application.
Step 3. Obtain
Authorization from Applicant
”End User” must obtain written authorization from
the applicant prior to gaining access to a consumer
report. The Authorization may be obtained in the
same document as the disclosure, which is an
exception to the general rule that “the disclosure
must be in a separate document that consists solely
of itself”. In fact, some FTC opinions have
found that having the authorization on the
disclosure heightens the consumer's awareness to the
disclosure and furthers its purpose. Therefore, one
of the ways to comply with the disclosure and
authorization requirements is to include the
authorization on the same document as the disclosure
but keep this combined document “separate and apart”
from the rental/employment application form. Another
method of compliance is to use two separate
documents, having both the disclosure and the
authorization separately obtained.
The type of background check you
are running will determine the type of authorization
& consent you will need to obtain. If you are
requesting a verification of the facts and do not go
beyond the facts, then a standard
disclosure and the
authorization is acceptable.
In some cases, you may order a
report for employment purposes that would also
constitute an “investigative consumer report.” (In
general, an investigative consumer report is one in
which information has been obtained through personal
interviews with friends, neighbors, or associates of
the Applicant or others with whom the Applicant is
acquainted or who may have knowledge concerning any
such items of information, and the information is
more than just a verification of facts.) In the
event that you order any investigative consumer
report, then an
investigative consumer report
disclosure and consent is required.
If you operate in California or
order a report on a California resident, in addition
to the other certifications required, you must
certify for each California report ordered that:
-
You will identify the CRA
including the name, address, and telephone
number to the Applicant when you provide the
disclosure to or obtain the
consent from the
Applicant.
-
You will provide a disclosure
with a box that can be checked by the Applicant
to indicate that he/she wants to obtain a free
copy of the Report and you will send such a copy
within three (3) business days of your receipt
of the Report if the box is checked; and
-
You will provide the
Applicant a
summary of his or her rights under
California Civil Code Section 1786.22.
Below, you will find the
different types of disclosure & authorization forms.
It is the “end user’s” responsibility to determine
the type of authorization required for your intent
and purpose. It is recommended you consult with
your legal counsel to ensure that your forms,
policies and procedures related to the use of CRA-provided
information are in compliance with applicable state
and federal laws.
Sample Disclosure & Authorization Forms
Employment Consumer Report
Investigative Consumer Report
California Consumer Report
Tenant Consumer Report
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Step 4. Pre-Adverse
Action Procedures
Not only does the denial of tenancy or employment
fall under the Fair Credit Reporting Act’s
definition of "adverse action", but any other
decision for employment purposes, which adversely
affects any current or prospective employee will
constitute an adverse action.* If the consumer report provides information that
will negatively influence the employment
opportunities of the applicant, whether in whole or
in part, you must perform “ALL” of the following
“BEFORE” such an adverse action is made:
-
Provide the applicant/employee with a
pre-adverse notification, either orally, in
written form or electronic communication.
-
Provide the
applicant/employee with a copy of the consumer
report.
-
Provide the applicant a description in writing
of their rights under the FCRA as prescribed by the
FTC in either written form or electronic
communication.
Sample Employment Pre-Adverse Action Notification
Sample Report
FTC Summary of Consumer Rights
FTC Summary of Consumer Rights (CA)
The above pre-adverse action process allows the
applicant the opportunity to dispute any negative
information contained in the report. The employer
should allow a reasonable amount of time for the
applicant to respond to this pre-adverse
notification before final determination is made or
adverse action is taken.
Step 5. Adverse Action
Procedures
If a landlord or employer decides to take
any adverse action (such as not renting or employing
the applicant), based in whole or in part, on the
information revealed in the consumer report, you
must perform the following, either in writing,
orally or electronically* (we recommend written
documentation).
-
Provide the applicant with an adverse action
notification*, either orally, in written form or
electronic communication.
-
Provide to the applicant, the name, address
and telephone number, including a toll-free number,
of the consumer-reporting agency.
-
Include a statement that "the
consumer-reporting agency did not make the decision
to take the adverse action and is unable to provide
the applicant the specific reasons why the adverse
action was taken".
-
Provide notice to the applicant of his/her
right to obtain within (60) sixty days, a free copy
of the consumer report from the consumer-reporting
agency.
-
Provide notice to the applicant of their right
to dispute, with the consumer-reporting agency, the
accuracy or completeness of any information in a
consumer report furnished by the consumer-reporting
agency.
Sample Employment Adverse Action Notification
Sample Tenant Adverse Action Notification
Some variances exist for non-written consent for
the trucking industry*
Please be aware that some states have compliance
requirements in addition to the FCRA. For example,
in the states of Minnesota and Oklahoma, you must
provide the applicant a written disclosure
containing a box the applicant may check if they
want to obtain a copy of the consumer report.
California has a similar requirement except it is
limited to consumer credit reports*
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