Adverse Action
Rules
Because of the normal turnover in people who
order ESS reports and in other
decision-makers who utilize ESS reports, we
feel it is important to regularly remind
everyone of the Adverse Action Rules. The
FCRA adverse action steps are federal law
and all employers who utilize consumer
reports have certified to
their consumer-reporting agency to follow
them. Please forward this reminder to
others in your company who use ESS reports
but may not be set-up to receive e-Updates.
If information in the ESS Report (a consumer
report) is in part or in whole the reason
for an adverse action (to not hire
or promote, transfer; to demote, or rescind
a job offer; to terminate employment; to
deny any employment benefit applied for),
then before taking
the adverse action, the applicant/employee
has a right to:
The clear intent of the FCRA Adverse Action
steps is to give the applicant/employee an
opportunity to dispute or explain
information in the Consumer Report before
the adverse action is taken. The FCRA is
totally silent on how long an employer
should wait before following up with the
prescribed Adverse Action Letter. This
time period will depend on how the consumer
report and Summary of Rights are transferred
to the applicant/employee -- regular mail,
express mail, email, in person. For
example, when ESS handles this process for
our clients, we send the documents by
regular mail unless specified otherwise. To
allow for mail time, we wait 4-5 days
before following up with the Adverse Action
Letter. If the documents were delivered
personally or by email, waiting a couple
days before sending the Adverse Action
Letter may be more reasonable.
After receiving the Consumer Report, the
applicant/employee may dispute or explain
information in the report. Sometimes a
dispute is lodged with ESS through the
employer; or, the individual may contact ESS
directly, in which case we document the
disputed information or explanation and
immediately notify our Client. Again, the
FCRA does not comment on whether an employer
should wait for a
possible applicant/employee dispute, or if
notified of a dispute,
wait before proceeding to fill the position
with another applicant. This is entirely an
internal decision; the only requirement is
giving the individual
a reasonable opportunity to dispute or
explain information in the report before the
actual adverse action is taken.
The FCRA gives consumer-reporting agencies
30 days to reinvestigate disputed
information and to issue its findings to
both the employer and to the consumer. ESS
can typically reinvestigate and issue
findings in 2-3 days. Sometimes the
applicant/employee does not dispute report
information but simply wants to explain some
information, in which case ESS adds a
Consumer Statement to the report and
re-issues the report right away.
The sample Pre-Adverse and Adverse Action
letters and FCRA Summary of
Rights are available by
Clicking Here, scroll down to the
section on Fair Credit Reporting Act. If
needed, the law/process is explained in more
detail under
"The FCRA" on our client site.
ESS is happy to handle the Adverse Action
process on your behalf. When faced
with this issue, simply send the adverse
action request to
adverseaction@employscreen.com. You
will get a receipt confirmation and
additional confirmations when the process is
completed. As mentioned, you will be
notified immediately if the report is
disputed. The fee is $5 per case; another
$6 added if certified mail is to be used for
the letters.
