FCRA and Legal

FCRA and Legal

What is a background check?

Background checks compile information about a person’s history. Background checks help individuals or institutions learn about a person’s criminal, financial, and employment history, plus possibly other information. Background checks can help verify an individual’s identity adding a measure of safety and security to a personal or business relationship. To learn more, visit our Background Checks education page.

What laws apply to PeopleSmart?

Unlike the European Union, which has a single set of laws governing personal information, the United States has multiple sector-specific laws, which govern different industries and types of data. As a result, a diverse legal spectrum applies to PeopleSmart. Here are some important restrictions:

  • The Fair Credit Reporting Act (FCRA) places clear restrictions on how personal information can be used for employment, credit, and insurance purposes.
  • The Driver’s Privacy Protection Act (DPPA) restricts the use information obtained from a registry of motor vehicles.
  • The FTC Policy Statement on Deception bans deception, defined as a representation, omission, or practice that is likely to mislead consumers acting reasonably, to the consumer’s detriment. Section 5 of the FTC Act says, "unfair or deceptive acts or practices in or affecting commerce are […] unlawful."

PeopleSmart complies with these guidelines by clearly stating what information we have, avoiding unfair or deceptive practices, and explaining how our information can be used. We also do not provide FCRA information; instead, we link to sites that do.

What is the Fair Credit Reporting Act (FCRA) and how does it apply to PeopleSmart?

Enacted in October 1970, the Fair Credit Reporting Act (FCRA) is the primary federal law that governs the preparation, dissemination, and use of background reports for employment purposes. It protects the privacy and accuracy of the information in background reports while delineating job applicant rights and employer responsibilities. Employers must use FCRA-compliant background screening companies like GoodHire.com to screen candidates. PeopleSmart is not a Consumer Reporting Agency as defined by the FCRA and cannot be used for background checks related to credit, insurance, employment eligibility, or any other purposes prohibited under the FCRA.

What is a Consumer Reporting Agency and how does it apply to PeopleSmart?

Consumer Reporting Agencies (CRAs) are companies that collect, assemble, evaluate, and sell consumer report information to and for third parties. Pre-employment background screening companies, like GoodHire.com, are CRAs that distinguish themselves from more general background screening companies, like PeopleSmart. Because GoodHire is a CRA, its reports are regulated by the Fair Credit Reporting Act.

What are prohibited uses of PeopleSmart under the Fair Credit Reporting Act?

PeopleSmart lets you find contact information, look up phone numbers, search public court records, and manage your online identity. PeopleSmart, however, is not a consumer-reporting agency as defined by the Fair Credit Reporting Act (FCRA).

You cannot use PeopleSmart to do any of the following:

Credit and Insurance

  • Establish someone's eligibility for credit or insurance
  • Assess the risk associated with someone’s existing consumer credit obligations
  • Evaluate an individual for employment, promotion, reassignment, or retention
  • Other Personal Business Transactions (including, but not limited to, leasing an apartment)

Employment (including, but not limited to, household workers)

  • Evaluate an individual for employment, promotion, reassignment, or retention

To access information for the above purposes, visit:

Employment

Tenant Screening

Credit

By using PeopleSmart, you agree to our Terms of Use. To learn more about how we protect our users and those with information in our database please visit our Privacy Policy.

Where can I run a legal background check for employment screening, since I can’t do that on PeopleSmart?

PeopleSmart is not a Consumer Reporting Agency as defined by the Fair Credit Reporting Act (FCRA) and so cannot be used for employment screening. For your employment screening needs, visit GoodHire, a leading FCRA-compliant employee screening service.

Why can’t I use PeopleSmart for decisions around credit, insurance, and employment eligibility?

The Fair Credit Reporting Act (FCRA) prohibits companies that are not Consumer Reporting Agencies from providing background information for the purposes of determining eligibility for credit, insurance, or employment. PeopleSmart is not a Consumer Reporting Agency and cannot be used for background checks for credit, insurance, or employment eligibility.

Why can’t I use PeopleSmart for housing employment and run a background check on household workers, such as babysitters, cleaning personnel, or nannies?

The Fair Credit Reporting Act (FCRA) prohibits companies that are not Consumer Reporting Agencies from providing background checks for employment screening, including for household workers, such as babysitters, cleaning personnel, or nannies. PeopleSmart is not a Consumer Reporting Agency and cannot be used for background checks for household workers, including babysitters, cleaning personnel, or nannies. A background check on a household worker that is used as a determinant for hiring must fully comply with FCRA guidelines. A nanny background check will likely include a Social Security Number trace, a criminal background check, a sex offender registry check, and more.

Why can’t I use PeopleSmart to run a background check on tenants?

Landlords are not required by law to perform background checks on prospective tenants, but many do as part of their due diligence. These background checks are subject to guidelines established in the FCRA and are thus more strictly regulated than private and personal background checks. You cannot use PeopleSmart for tenant screening because PeopleSmart is not a Consumer Reporting Agency as defined by the FCRA. Lease Runner provides tenant screening services.

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