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Interpretations and understanding of what the Fair Credit Reporting Act (FCRA) means to employers are snowballing, thanks in large part to the rise of legal cases helping to define duties of employers.
The FCRA is a notoriously tough law to understand. As an employer who uses a background screening company to collect background information on their applicants and employees (called “Consumer Reports” under the FCRA), you know well that you have obligations under the law. In addition to potential duties for some employers, the FCRA contains extremely technical requirements and has an abundance of shifting interpretations. The nature of the FCRA has created a seemingly “perfect storm” for potential litigation.
An uptick in FCRA claims filed
There has been a persistent upward trend for filed FCRA litigation. Every year seems to see more FCRA claims filed than the last. Just take a look at the numbers pulled from WebRecon, a company that tracks hot areas of consumer protection litigation:
| YEAR | NUMBER OF FCRA CLAIMS |
| 2014 | 2,501 |
| 2015 | 3,807 |
| 2016 | 3,954 |
| 2017 | 4,346 |
| 2018 | 4,531 |
In the past five years, there has been an approximate 81.2% increase in annual FCRA claims filed, a staggering rise in FCRA claims. Year-over-year increases point to an acute trend, not just long-term tipping of the scale.
And the upward trend doesn’t show any signs of slowing. Just this year, there were 3,297 FCRA cases filed between January and August alone. Compared to this same period in 2018, there is an increase of nearly 5.1% so far in 2019. To see the numbers for yourself, click here.
More FCRA claims, more problems
No employer wants to become another statistic in the upward trend of FCRA litigation. With these numbers in mind, maybe it’s time you took another look at your background check forms and background check policies. You may want to check with an experienced background screening partner, like Verified Credentials, to see if they have any reference or sample forms to get you thinking critically about your background check program.
A thoughtful review of your duties under the FCRA is no small task. Before you make any changes to your background screening program, work with a trusted legal advisor to help ensure that you comply with federal, state, and local laws.