The FCRA §603(e) defines an Investigative Consumer Report (an ICR) as “a report or portion thereof in which information on a consumer’s character, general reputation, personal characteristics, or mode of living is obtained through personal interviews with neighbors, friends, or associates of the consumer reported on or with others with whom he is acquainted or who may have knowledge concerning any such items of information…”
Essentially, personal or professional reference verification, and employment verification that stray beyond the realm of facts and into personal character assessments and opinions are considered Investigative Consumer Reports. They can be independent background checks, or they could be a part of a regular consumer report.
In California all consumer reports are considered ICRs, and California law (the California Investigative Consumer Reporting Agencies Act ICRAA) must be followed in addition to federal law.
What are the compliance requirements for running an investigative consumer report?
An Investigative Consumer Report requires a separate disclosure as to the nature and scope of the report as well as separate authorization. Technically, when an ICR is part of a regular consumer report, the disclosure with an explanation of the nature and scope of the investigative portion, must be obtained separately from the disclosure for the consumer report. There must also be a notice with the disclosure that a full and detailed disclosure of the nature and scope of the investigation can be obtained upon request.
Authorizations can be combined, but with the separate disclosure requirement it is easier to utilize a disclosure and authorization form for the consumer report and a separate one for the ICR. That way, if the ICR is obtained alone, you already have the required disclosure and authorization ready to go.
If obtaining potentially adverse information from interviews with neighbors, friends, or associates, the CRA performing the ICR must verify that the information provided has been verified, or that the person providing the information is the “best possible source of the information.” FCRA §606(d)(4)(B)
Additionally, §614 stipulates that any adverse information obtained through ICR personal interviews must be obtained within a 3 month period of the report being provided to the party requesting such background check, typically an employer.
Why would companies want to run these checks on potential employees?
Investigative Consumer Reports are commonly opinions of those with a personal relationship or a person who has immediate knowledge of the applicant. This information goes beyond a typical consumer report for a picture of your applicant in a more personal light that information obtained from a consumer report does not. For example, information obtained in a typical consumer report may include credit information, criminal history, factual past employment information, or driving records.
An ICR would ask about a person’s job performance, if it is a professional reference and the best source of the information, or how a person gets along with others in a work setting. This information cannot be gleaned from a consumer report, and if done correctly can give a potential employer more insight into an applicant’s character, work habits, and personal characteristics.
Are there risks associated with running an investigative consumer report?
There are risks involved in running any consumer report. As Investigative Consumer Reports require additional authorization and disclosure, compliance can be tricky when the employer doesn’t understand or want the hassle of following the additional requirements and simple mistakes can occur. Both negligent and willful violations of FCRA compliance can result in a substantial fine for each instance, if a lawsuit is brought against the employer or against the CRA providing the information to the employer.
How are the people chosen for the personal interviews?
Employment verification relies on information from records obtained, as often as possible, directly from the human resources department, payroll, or the owner/operator of the company. From there, if non-factual information is being requested (such as the opinion of the employer about the applicant) it is obtained from the owner/operator or a supervisor who would have direct knowledge of the applicant’s work experience.
Professional or personal references conducted by Blueline Services are conducted with the people provided by the applicant as references. Upon request some references are found by asking the provided reference if they know anybody who would be able to answer the same questions about the applicant (references from references).