Mark D. Mailman of Francis Mailman Soumilas. Courtesy photoCFPB Clarifies Employers’ Obligations When Using Background Dossiers and Algorithmic Scores in Employment Decisions
It’s long been an open secret that employers often review the consumer reports of job candidates when conducting background checks on them. While there might be merit to using these reports in the hiring process, employers can obtain and use the information in the reports in ways that violate the Fair Credit Reporting Act (FCRA).
January 06, 2025 at 12:18 PM
7 minute read
It’s long been an open secret that employers often review the consumer reports of job candidates when conducting background checks on them. While there might be merit to using these reports in the hiring process, employers can obtain and use the information in the reports in ways that violate the Fair Credit Reporting Act (FCRA).
Recognizing that potential, the Consumer Financial Protection Bureau (CFPB) recently addressed employers’ obligations under the FCRA when using background dossiers, algorithmic scores and other third-party consumer reports to make employment decisions. In its Circular 2024-06, the CFPB reinforces employers’ legal obligations to adhere to the requirements and restrictions of the FCRA when doing so.
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