FCRA: what you owe a candidate when a résumé claim fails

This page describes the federal framework in general terms. It is not legal advice, and whether these duties attach to a particular check is a question for your counsel.

When a résumé check is a consumer report

The trigger is not the word on the invoice. Under federal law, when a third party assembles or evaluates information bearing on a candidate for employment purposes and gives you the result, that result is generally a consumer report and the third party is generally a consumer reporting agency — whether it is a criminal record search, an employment verification, or a written finding that public sources do not support a claim on the résumé. A reviewer on your own team reading the same public sources and writing the same note is generally doing something the FCRA treats differently, because no third party furnished the report — but that distinction is narrower than it sounds, and state law and other rules can still reach it.

Before the check: disclosure and authorization

Section 1681b(b) puts two steps ahead of the report. You must tell the person in writing, in a document that consists solely of that disclosure, that a consumer report may be obtained for employment purposes, and you must get their written authorization. The FTC's employer guidance describes the same two steps and adds the certification you give the reporting company: that you disclosed, that you complied, and that you will not misuse the information or use it to discriminate.

Before you act: the pre-adverse action notice

If you are considering not hiring someone, or any other adverse action, based in whole or in part on the report, the notice comes before the decision takes effect. It must include a copy of the report you relied on and a copy of the current "A Summary of Your Rights Under the Fair Credit Reporting Act," the model form the CFPB publishes and periodically revises. The point of the sequence is that the candidate sees the same document you did while it can still change the outcome.

A reasonable time to dispute

The statute does not name a waiting period. FTC staff addressed the gap in a 1997 advisory opinion, saying that although the facts of a particular situation may require a different time, the five-day period proposed to them appeared reasonable — which is why five business days has become common practice rather than a rule. Some state and local laws require longer, and longer is generally the safer side of an unspecified standard. If the candidate disputes something, the reporting agency has its own reinvestigation duties, and acting before that finishes is where a paperwork question becomes a real exposure.

The adverse action notice, and what your jurisdiction adds

Once you go ahead, the second notice tells the candidate that the action was taken, names the consumer reporting company with its address and phone number, states that the company did not make the decision, and explains the right to dispute the accuracy or completeness of the information and to get a free copy of the report from that company within 60 days. State and city law can add obligations on top of this, such as longer waiting periods, extra notices, or limits on what may be considered, so check the rules for your state and for where the candidate lives, not only your own. Gram operates as a consumer reporting agency and builds these steps into the reviewer's workflow.