Many employers have third-party services run background checks on applicants, new hires, or existing employees. Many of these employers utilize these services to minimize the risk of claims of negligent hiring or discrimination. Even if a reputable service is used, there are challenges and significant legal risks involving the failure to comply with the federal Fair Credit Reporting Act (FCRA). Employers that violate the FCRA may be liable for actual damages sustained by individual applicants, statutory damages ranging between $100 and $1,000 per individual violation, punitive damages, and plaintiffs’ attorneys’ fees and costs. As a result, the FCRA is the source of one wave of class actions sweeping the country, a wave fueled by statutes that favor both plaintiffs (who need not even show they were harmed by a violation in order to file a lawsuit) and their attorneys, and recent headlines announcing million-dollar settlements.

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Posted Under: EBI

Post By Barry Nixon (262 Posts)

W. Barry Nixon is the COO, the leading background screening information portal and online worldwide directory of professional background screening firms and Suppliers to the background screening industry. He co-authored the landmark book, Background Screening & Investigations: Managing Hiring Risk from the HR and Security Perspective. He also is the publisher of award winning newsletters, The Background Buzz and The Global Background Screener, and the author of the Background Checks column in PI Magazine.

In addition, Barry is a past recipient of the elite ‘Top 25 Influential People in Security’ by Security Magazine and past Co-Chair, International Committee for the National Association for Professional Background Screeners (NAPBS). He currently serves as a Global Ambassador for NAPBS.

You can contact Barry at 1-949-770-5264 or online at