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FCRA Compliance

Updated: January 20, 2025

When Vcheck Global acts as a consumer reporting agency, we must follow certain guidelines under the Fair Credit Reporting Act (FCRA) and the Fair and Accurate Credit Transactions Act (FACT Act). These statutes impose various usage requirements for both consumers and businesses when ordering certain background, investigative, personal and other reports.  Some of the reports that we offer do not fall under these Acts.

The Fair Credit Reporting Act (FCRA), first enacted in 1971, deals with the rights of consumers in relation to their credit reports and the obligations of credit reporting agencies and the businesses that provide information to them.

The FACT Act of 2003 created new responsibilities for consumer reporting agencies and users of consumer reports, many concerning disclosures and identity theft. It also created new rights for consumers, including the right to free annual consumer reports and improved access to report information, with the aim of making data in the consumer reporting system more accurate.  Free credit reports are available directly to consumers under the FACT Act at www.annualcreditreports.com, the only authorized source under Federal Law.

The FCRA allows a consumer reporting agency, like Vcheck Global, to furnish a consumer report (a written, oral, or other communication of information by a consumer reporting agency bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living, which is used or expected to be used or collected in whole or in part for the purpose of establishing the consumer’s eligibility for (a) credit or insurance to be used primarily for personal, family, or household purposes, (b) employment purposes (such as employment, promotion, reassignment or retention), or (c) any other purpose authorized under section 1681b of the FCRA). “Employment purposes” may include both full- and part-time employees, as well as contractors, remote workers, temporary workers, volunteers and others. 

A Consumer Reporting Agency may generally furnish a consumer report under the following instances (permissible purposes);

  1. In response to a court order or federal grand jury or other subpoena.
  2. In accordance with the written instructions of the consumer to whom the report relates.
  3. To a person (which includes partnerships, corporations, trusts, estates, cooperatives, associations, government, government agencies or other entities – including financial institutions)  which it has reason to believe:
  • Intends to use the information in connection with a credit transaction involving the consumer on whom the information is to be furnished and involving the extension of credit to, or review or collection of an account of, the consumer;
  • Intends to use the information for employment purposes;
  • Intends to use the information in connection with the underwriting of insurance involving the consumer;
  • Intends to use the information in connection with a determination of the consumer’s eligibility for a license or other benefit granted by a governmental instrumentality that is required by law to consider an applicant’s financial responsibility or status;
  • Intends to use the information, as a potential investor or servicer or a current insurer, in connection with a valuation of, or an assessment of the credit or prepayment risks associated with, an existing credit obligation; or
  • Otherwise has a legitimate business need for the information either
    •  in connection with a business transaction that is initiated by the consumer, or
    • to review an account to determine whether the consumer continues to meet the terms of the account.

4. In response to a request by the head of a State or local child support enforcement agency (or authorized appointee), if the person certifies various information to the consumer reporting agency regarding the need to obtain the report for the purpose of establishing child support payments or the appropriate level of such payments. [Such consumer reports are kept confidential and are not to be used for any other purpose or in civil, administrative or criminal proceedings. Generally, a financial institution that is not a consumer reporting agency is not involved in such a situation.]

5. To an agency administrating a State plan under 42 U.S.C. §654 for an initial or modified child support award;

6. To the Federal Deposit Insurance Company or the National Credit Union Administration as part of preparation for its appointment as a conservator, receiver or liquidating agent for an insured depository institution or insured credit union under the Federal Deposit Insurance Act or the Federal Credit Union Act, or other applicable federal or state law, or in connection with the resolution or liquidation of a failed or failing institution or credit union.

To obtain a consumer report, a company must:

  • Tell the applicant or employee that you might use information in their consumer report for decisions related to their employment.  The notice must be in writing and in a stand-alone format and cannot be included in an employment application.
  • Get written permission from the applicant or employee.  This can be part of the document used to notify the person that you will obtain a consumer report.
  • Certify compliance to the company from which you are getting the applicant or employee’s information. You must certify that you:
    • Notified the applicant or employee and got their permission to get a consumer report;
    • Complied with all of the FCRA requirements; and
    • Will not discriminate against the applicant or employee or otherwise misused the information, as provided by any applicable Federal or State equal opportunity laws or regulations.

If an adverse action is taken based on information in a consumer report, you must give the applicant or employee a notice of that fact – orally, in writing or electronically. An adverse action notice tells people about their rights to see information being reported about them and to correct inaccurate information.  The notice must include:

  • The name, address, and phone number of the consumer reporting company that supplied the report;
  • A statement that the company that supplied the report did not make the decision to take the unfavorable action and can’t give specific reasons for it;
  • A notice of the person’s right to dispute the accuracy or completeness of any information the consumer reporting company furnished, and to get an additional free report from the company if the person asks for it within 60 days. 

Vcheck Global cannot provide legal advice on your company’s FCRA compliance, but provides the links below for more information about your legal rights and obligations under the FCRA prior to submitting a request for a report.  Many U.S. states or municipalities may have additional requirements concerning consumer reports. Companies that do not comply with the FCRA may be subject to penalties.   

Links