Effective as of January 23, 2024, the CFPB issued an advisory opinion addressing issues in background check reports, which are used by most employers and landlords to screen workers and renters.
About forty-five states now allow people to expunge, seal, or set aside certain convictions in some circumstances, but background check CRA’s sometimes include these records in consumer reports they provide to employers and landlords.
The CFPB advisory opinion states that background reports should not contain records that have "been expunged, sealed, or otherwise legally restricted from public access” and that a CRA violates § 1681e(b) if it fails to follow reasonable procedures to prevent such records from appearing in consumer reports. FCRA Background Screening AO, 89 Fed. Reg. 4171, at 4172 (Jan. 23, 2024).
These laws are intended to give consumers a new start and recognizes that lingering criminal records hinder a consumer from housing, jobs, and economic stability.
Outdated Records
A common error in background reports is the CRAs’ failure to update public records information, resulting in the reporting of outdated records. This often occurs when the CRA fails to purchase updates from public record vendors or reliance on automated record scraping that ignores developments in a legal case. The CFPB advisory notes that these practices violate the FCRA. A CRA must have reasonable procedures to include “any existing disposition information if it reports arrests, criminal charges, eviction proceedings, or other court filings.”
Duplicate Records
Background reports commonly contain multiple entries for the same criminal case. Duplicate entries are because the CRA or its vendor obtains information from multiple sources. The CFPB advisory opinion requires that, when a CRA reports multiple stages of the same court proceeding, “it must have procedures in place to ensure that information regarding the stages of these court proceedings (such as an arrest followed by a conviction) is presented in a way that makes clear the stages all relate to the same proceeding or case and does not inaccurately suggest that multiple proceedings or cases have occurred.” If duplicate records caused by a CRA collecting information from multiple sources, the CRA “must take particular care to identify information that is duplicative to ensure that information is accurately presented in consumer reports.”
Seven Year Reporting Period
The FCRA limits the reporting of most adverse information to seven years (Section 1681c(a). The exceptions are for bankruptcies, which can be reported for ten years and criminal convictions which can be reported indefinitely. Arrests, criminal charges, and eviction cases are subject to the seven-year limit. A CRA cannot report an arrest for up to seven years from the date of dismissal, rather than from the date of the arrest record.