Keep Disclosures Simple


Background checks used to determine eligibility for things such as jobs, housing, or credit fall under the purview of consumer reports and are regulated by the Fair Credit Reporting Act (FCRA).

FCRA-compliant background checks require careful attention to various disclosure requirements. These Background Check Disclosure requirements include the following:

Before the check: You must disclose to the individual your intent to run a background check and obtain their written authorization.

After the check: If the background check returns information you believe makes the individual ineligible before you take any adverse action, you must provide a pre-adverse action notification that includes the results of the report and information about how to correct or contest the report. Once you’ve given the individual sufficient time to correct errors or challenge the results in any way, if you are still determined to take an adverse action, you must disclose that decision in an adverse action notification.

These disclosures are essential to compliance. These disclosures are also intended to be simple. They need to include clear language that is easy to understand. They must stand alone and not be combined with any other documents. Resist the temptation to make these documents more complicated than necessary by adding complicated legal jargon, extraneous waivers, or anything like the following:

  • Liability waivers for conducting, obtaining, using, or storing background check information
  • Employee certifications that all application information is correct
  • Employee acknowledgments that your organization only uses background screening information in non-discriminatory ways
  • Overly broad authorizations that sanction the release of information that the FCRA doesn’t typically permit to be used in a consumer report
  • Any language that implies the disclosure and authorization are all-encompassing

All this superfluous stuff makes it harder for applicants to understand the main purpose of the disclosure and may actually violate the regulations set forth in the FCRA. If you have additional disclosures or waivers you’d like the applicant to consider, they should be presented in separate documents.

The Disclosure Consequences

Unclear, convoluted disclosures are regularly the source of FCRA litigation. For example, in 2018, companies like Costco, Petco, Omnicare, and Frito-Lay paid millions of dollars in settlements related to FCRA disclosure violations, all of which could have been avoided by keeping their documents simple and on point.

The Bottom Line

FCRA disclosure requirements are simple. You can satisfy all the requirements in just a few short sentences. It’s all about respecting the rights of the individual. Keeping that in mind will help you focus on creating disclosures that are brief, easy to understand, and informative. Clear and conspicuous is the goal. That’s it. Keep it simple.

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