What am I required to do when I deny an applicant?

What am I required to do when I deny an applicant?

If you decide not to hire, promote, retain, or contract with an applicant based in whole or in part on information found in a background check, you are required to follow the Fair Credit Reporting Act (FCRA) adverse action process.

This process ensures the applicant is given the opportunity to review their report and dispute any inaccurate information before a final decision is made.

Step 1: Send a Pre-Adverse Action Notice

Before you make a final decision, you must send the applicant a Pre-Adverse Action Notice, along with:

• A copy of their background report

• A copy of the document: “A Summary of Your Rights Under the FCRA”

This gives the applicant a fair chance to review the report and respond.

Step 2: Allow a Reasonable Waiting Period

After the pre-adverse action notice is sent, you must allow the applicant a reasonable amount of time to respond before issuing a final denial.

This waiting period allows the applicant to dispute any potential inaccuracies.

Step 3: Send the Final Adverse Action Notice

If you move forward with denying the applicant after the waiting period, you must send a Final Adverse Action Notice.

This notice must include required information under FCRA guidelines, such as:

• The name and contact information of the Consumer Reporting Agency (CRA)

• A statement that the CRA did not make the decision

• Notice of the applicant’s right to dispute the report

• Notice of the applicant’s right to request another free copy of the report within 60 days

Need Help?

You are responsible for sending the required adverse action notices in compliance with FCRA guidelines.

If you would like Bchex to handle the adverse action process on your behalf, please contact Client Services at clientservices@bchex.com.

For more information, view:  Adverse Action Process Overview