Consumer Reporting Agencies (Cras) Basics

Consumer reporting agencies, or CRAs, used to focus solely on information related to a person’s credit history. However, now they provide much more. CRAs are businesses that gather information on individuals, compile it, and report the information back to companies for use of employment purposes, tenancy and credit evaluation, and other purposes.

Consumer reporting agencies are sometimes called “Background Screening Companies.” 3rd Degree Screening is a CRA and they are chosen by organizations to screen individuals whom have applied to work or volunteer at your company. They follow the guidelines outlined by the FCRA (Fair Credit Reporting Act) when providing your organization with a consumer report that is used to determine if you will hire a person or allow them to volunteer for your organization.

According to the FCRA, there are five basic duties of a CRA:

1. Follow reasonable procedures to assure they are providing information with the maximum possible accuracy about an individual. The CRA must show that they have done everything they can to show that the information provided is current and complete.

2. Provide consumer reports to those that have permissible purpose. In other words, a CRA cannot provide a report to just anyone on an individual. The information must be requested from a subpoena or court order, a signed authorization form from the person who is the subject of the report, for employment purposes, for insurance underwriting, tenant screeners, etc.

3. Conduct a reinvestigation if the subject of the report disputes it. The CRA must reinvestigate the disputed information to determine if the disputed information is accurate.

4. Disclose information to consumers on searches they were the subject of. This allows consumers to watch for any discrepancies in the information so they can correct it immediately. It also includes the CRA providing consumers with a summary of their rights under the FCRA.

5. Properly dispose of consumer information. Under the FTC, the Bureau of Consumer Protection has specifically outlined how consumer report information should be disposed of, not just for CRAs but for employers, insurers, debt collectors, government agencies, etc. This helps protect people from possible identity theft due to not properly disposing of records.

The above duties were taken from the training materials for the FCRA Basic Certification course through NAPBS.
background checksBackground checks are becoming part of the norm when it comes to organizations hiring persons for jobs or looking for volunteers. Companies that do their own background checks perform those based on the information provided by the applicant. And in doing so, they accept all the liability should the person dispute any of the information that comes back in the search.

However, if you choose to use a CRA for your screening, the CRA takes on that liability. The other benefit of using a CRA is that they understand the FCRA guidelines as well as those set-forth by the EEOC (Equal Employment Opportunity Commission) regarding the use of criminal background checks for employment screening purposes.

3rd Degree Screening has received their FCRA Basic Certification from the National Association of Professional Background Screeners. We have over 18 years experience in the background screening industry and work to protect, not only your company, but the applicant applying with your company. We know how important it is that the information in the consumer report is accurate and reliable.