How to Deal with Applicant Background Check Disputes

adverse action flow chart

Forward-thinking employers always commission background checks when they hire new employees. It’s the best way to be sure the person you’re hiring really is who he says he is. Most of the time, background checks will come back clean, but occasionally, the results will tell a different story from what the applicant has told you. For instance, if you were hiring for an accounting position and the background check revealed the applicant had committed embezzlement, you may decide to hire someone else. In such cases, you are within your rights to refuse employment to the person, but you have to follow the right steps so that you are kept legally in the clear.

Provide pre-adverse action letter

First, according to the Fair Credit Report Act (FCRA) you must issue a pre-adverse action letter to the applicant. This should let the person know the reasons for their disqualification and tell them how long they have to dispute the report’s findings. The FCRA suggests a period of 5 business days, but you may decide on a longer or shorter period of time, as long as it is reasonable. You must also provide them with a copy of “A Summary of Your Rights Under the Fair Credit Reporting Act,” a copy of the background check’s results, and the name, address, and phone number of the consumer reporting agency who supplied you with the consumer report.

Applicants may request copy of background check

Applicants who are denied employment based in whole or in part on their background check are entitled to a free background screening report from the named agency within 60 days of their employment being denied or terminated. If a background report provided by Victig is disputed, the disputing employee can be directed to the Victig Consumer Copy webpage where there is a form for him or her to fill out. Some possible reasons employees may dispute the record might be disagreement about dates of education completed or offenses committed, mistaken omission of education information, or inclusion of records that have been expunged.

Financial holds

On occasion, education or degrees completed will not appear on the background check because of outstanding financial obligations the applicant has with the school. This is known as a financial hold. Once the hold is removed, the applicant could request the background check be redone to reflect the correct education records.

Get it in writing

It is important that each step of the adverse action or background check disputation be recorded in writing to protect yourself legally. The Fair Credit Report Act says, “Pre-adverse action disclosure can be issued to current employees or applicants orally, in writing, or electronically. However, FTC Commentary recommends providing adverse action notification in writing so that employers have evidence they took reasonable steps to comply with the FCRA.”