Yes, the Fair Credit Reporting Act applies to criminal background checks whenever an employer, landlord, or insurer uses a third-party screening company to prepare the report. That single fact pulls in a set of federal protections: written consent before the check runs, a specific notice process before any negative decision, limits on how far back certain records can be reported, and a right to dispute anything inaccurate. Employment is where most criminal record disputes arise, and it is where the law’s requirements bite hardest.
When the FCRA Applies, and When It Doesn’t
Two conditions have to be met. First, a consumer reporting agency has to be involved. A CRA is any company that regularly gathers and sells consumer information to third parties, and that definition captures background screening companies even when they don’t market themselves that way.1Federal Trade Commission. What Employment Background Screening Companies Need to Know About the Fair Credit Reporting Act Second, the report has to be obtained for a purpose the statute recognizes. For employment, that means any report used to evaluate someone for hiring, promotion, reassignment, or retention.2Office of the Law Revision Counsel. 15 USC 1681a – Definitions; Rules of Construction
When both are present, the full FCRA framework applies. When either is missing, it does not. An employer who runs criminal record searches in-house using public court records, without hiring a screening company, is not using a CRA and falls outside the statute’s reach. Landlords and insurers who use screening companies for criminal checks are also covered, though the employer-specific obligations below apply only in the employment context.3Consumer Financial Protection Bureau. Fair Credit Reporting; Background Screening
What an Employer Must Do Before Running the Check
Before ordering a background check through a screening company, the employer has to give you a written disclosure stating that a consumer report may be obtained for employment purposes. This disclosure must stand alone as its own document. It cannot be buried inside a job application, combined with a liability waiver, or mixed into other hiring paperwork.4Office of the Law Revision Counsel. 15 USC 1681b – Permissible Purposes of Consumer Reports The employer also has to get your written authorization. The authorization can appear on the same page as the standalone disclosure, so a single signed form can serve both purposes.5Federal Trade Commission. Using Consumer Reports: What Employers Need to Know
Skipping either step is a common failure, and it creates legal exposure before the check even comes back. If you were never given a standalone disclosure or never signed an authorization, the process may have violated the FCRA from the start.
Some checks go beyond database searches and involve personal interviews about your character, reputation, or lifestyle. These are called investigative consumer reports. The employer has to notify you in writing within three days of requesting the report, and the notice must tell you that you can request a description of the investigation’s scope. If you make that request in writing, the employer has five days to respond.6Office of the Law Revision Counsel. 15 USC 1681d – Disclosure of Investigative Consumer Reports
The Adverse Action Process
If an employer plans to deny you a job, fire you, or take another negative employment action based partly or entirely on a background check, the FCRA requires a two-step notice procedure. This is where most FCRA lawsuits come from.
Step one is the pre-adverse action notice. Before the decision becomes final, the employer must send you a copy of the background check report along with a written summary of your FCRA rights.4Office of the Law Revision Counsel. 15 USC 1681b – Permissible Purposes of Consumer Reports The point is to give you a real chance to see what the report says and dispute anything wrong before a final decision. The statute does not specify an exact waiting period, but FTC guidance and court decisions have generally treated five business days as reasonable.5Federal Trade Commission. Using Consumer Reports: What Employers Need to Know
Step two, if the employer proceeds with the negative decision, is the final adverse action notice. It must include the screening company’s name, address, and phone number; a statement that the screening company did not make the employment decision and cannot explain it; and notice that you can dispute the report’s accuracy directly with the CRA and are entitled to a free copy of the report within 60 days.
This structure exists because background check errors are not rare. Names get confused, dismissed charges show up as convictions, and records from other jurisdictions get attached to the wrong person. The pre-adverse action notice gives you a narrow but real window to catch those mistakes before they cost you a job.
How Far Back Criminal Records Can Appear
The FCRA limits how far back a screening company can report most negative information. Arrests that did not lead to a conviction, civil suits, civil judgments, collection accounts, and other adverse items generally cannot appear on a report if they are more than seven years old.7Office of the Law Revision Counsel. 15 USC 1681c – Requirements Relating to Information Contained in Consumer Reports
Criminal convictions are the major exception. Federal law places no time limit on reporting convictions, regardless of how old they are or how much the position pays. A 20-year-old felony conviction can legally appear on a background check under the FCRA.
The seven-year limit also has a salary exception: if the position pays $75,000 or more per year, none of the time-based reporting restrictions apply, so even old arrests without convictions can be reported. Many states have enacted stricter rules. Some prohibit reporting arrests that didn’t result in convictions regardless of salary, and a few limit how far back convictions can be reported. When state law is more protective, the screening company must follow the stricter rule.
Your Rights When Something’s Wrong
When a criminal background check runs through a screening company, the FCRA gives you several concrete rights:
- You have the right to know a report was used against you. If an employer relies on the background check to deny employment or take another negative action, the employer must notify you and identify the screening company.
- You can request a copy of everything a CRA has on file about you, including the sources of the information.
- You can dispute incomplete or inaccurate information directly with the CRA. The agency must conduct a free investigation and resolve it within 30 days, extendable by 15 days if you submit new relevant information during the initial period. If the CRA finds the disputed item is inaccurate or unverifiable, no extension applies.8Office of the Law Revision Counsel. 15 USC 1681i – Procedure in Case of Disputed Accuracy
- After an adverse action notice, you are entitled to a free copy of your consumer report within 60 days.
The dispute right matters most in practice. Errors on criminal background checks often trace to database mismatches: someone with a similar name, a record from the wrong county, or a charge that was dismissed but still shows as pending. When you dispute an error, the CRA has to notify whoever furnished the information and investigate. If the information cannot be verified, the CRA must delete it.
What the FCRA Doesn’t Decide
The FCRA governs how criminal background checks are obtained and processed. It does not tell an employer whether it can reject you over a criminal record. That question falls under anti-discrimination law and, in many places, state or local fair-chance rules.
The EEOC has issued guidance explaining that blanket policies excluding anyone with a criminal record can violate Title VII of the Civil Rights Act if they disproportionately screen out applicants of a particular race or national origin without being job-related.9U.S. Equal Employment Opportunity Commission. Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under the EEOC’s framework, an employer using criminal history should consider the nature of the crime, the time that has passed, and the nature of the job, and should offer an individualized assessment giving the applicant a chance to explain the circumstances. The guidance draws a clear line between arrests and convictions: an arrest alone does not prove conduct, so excluding someone based on an arrest record without considering the underlying conduct generally will not survive a discrimination challenge.
Beyond that, more than half the states and many cities have fair-chance or “ban the box” laws that restrict when an employer can ask about criminal history, often delaying the inquiry until after a conditional job offer. The federal Fair Chance Act applies a similar restriction to federal agencies and contractors. These laws layer on top of the FCRA rather than replacing it.
What You Can Recover for a Violation
Penalties depend on whether the violation was willful or merely negligent.
For willful violations, where the employer or screening company knowingly ignored the law, you can recover your actual financial losses or statutory damages between $100 and $1,000 per violation, whichever is greater. A court can also award punitive damages in whatever amount it considers appropriate, plus attorney’s fees and court costs.10Office of the Law Revision Counsel. 15 USC 1681n – Civil Liability for Willful Noncompliance The statutory-damages provision is what makes class actions viable: when a large employer runs noncompliant checks on thousands of applicants, $100 apiece adds up.
For negligent violations, recovery is narrower. You can collect actual damages, attorney’s fees, and court costs, but there are no statutory minimums and no punitive damages.11Office of the Law Revision Counsel. 15 USC 1681o – Civil Liability for Negligent Noncompliance Negligence claims are harder to bring without concrete financial harm such as lost wages from a job you didn’t get.
There is a hard deadline. You have to file within two years of discovering the violation or five years from the date it occurred, whichever comes first.12Office of the Law Revision Counsel. 15 USC 1681p – Jurisdiction of Courts; Limitation of Actions The discovery rule matters because you might not learn that a screening company reported inaccurate criminal history until months after the fact.
How to File a Complaint
If you believe an employer or screening company violated your FCRA rights, you can file a complaint with the Consumer Financial Protection Bureau, the primary federal agency overseeing the FCRA. Complaints can be submitted online at consumerfinance.gov/complaint or by calling (855) 411-2372. The CFPB forwards complaints to the company involved and typically expects a response within 15 days.13Consumer Financial Protection Bureau. Submit a Complaint Filing does not replace your right to sue, but it creates an official record and can prompt a resolution without litigation.