Ch. 9: Fair Credit Reporting Act (FCRA) Flashcards
(20 cards)
What does FCRA stand for?
a) Federal Crime Reduction Act
b) Fair Consumer Rights Association
c) Federal Credit Reporting Act
d) Fair Credit Regulations Act
c) Federal Credit Reporting Act
In the context of pre-employment background investigations, what term can replace “Consumer Reporting Agency” according to the text?
a) Credit Bureau
b) Background Investigations Agency
c) Employment Agency
d) Legal Firm
b) Background Investigations Agency
If you are unsure if the FCRA applies to your agency, what should you assume?
a) The FCRA does not apply.
b) The FCRA might apply, but it’s not crucial.
c) The FCRA applies.
d) You should consult with an attorney and make no assumptions.
c) The FCRA applies.
Which question is NOT part of the “Consumer Reporting Agency Test” provided in the text?
a) Do you accept money in order to perform a background check for a third party?
b) Do you regularly engage in the practice of assembling or evaluating reports based on a person’s creditworthiness?
c) Do you offer legal advice as part of your services?
d) Will your report be used for employment purposes, eligibility for credit, or insurance?
c) Do you offer legal advice as part of your services?
What is considered a “Consumer Report” according to the “Consumer Report Test” in the text?
a) Information about an individual’s hobbies and interests.
b) Information that has a bearing on an individual’s creditworthiness and will be used for employment purposes.
c) General news articles about an individual.
d) Weather forecasts related to an individual’s location.
b) Information that has a bearing on an individual’s creditworthiness and will be used for employment purposes.
What does an employer need to certify to an investigation agency performing a background check?
a) The employer has received written instructions from the applicant to perform the check.
b) The employer will only use the background check for marketing purposes.
c) The employer will share the report with all interested parties.
d) The employer will provide a copy of their tax returns.
a) The employer has received written instructions from the applicant to perform the check.
What is a pre-adverse action by an employer?
a) Firing an employee based on a background report without notice.
b) Informing an applicant they might not be hired based on a background report and providing them a copy of the report and FCRA rights summary.
c) Ignoring the background report and hiring the applicant anyway.
d) Requesting an updated background report without informing the applicant.
b) Informing an applicant they might not be hired based on a background report and providing them a copy of the report and FCRA rights summary.
If an employer takes an adverse action based on your report, what must the notice to the applicant NOT include?
a) The name and address of the company that supplied the background information.
b) Specific reasons for the adverse action provided by the investigation company.
c) A notice of the applicant’s right to dispute the accuracy of information in the report.
d) The right to get an additional free report from the company that supplied the information.
b) Specific reasons for the adverse action provided by the investigation company.
According to the FCRA, what type of information should you generally NOT include in a background report?
a) Educational background.
b) Previous employment history.
c) Medical information, except in very limited circumstances.
d) Criminal convictions
c) Medical information, except in very limited circumstances.
How old must a case under the Bankruptcy Act be before it cannot be included in a background report?
a) Less than 5 years old.
b) Less than 7 years old.
c) Less than 10 years old.
d) Less than 12 years old.
c) Less than 10 years old.
When can you include a credit report in a background report?
a) Only with the applicant’s explicit permission.
b) When the annual salary of the applicant can be reasonably expected to equal $75,000 or more annually.
c) For all employment purposes.
d) Only when requested by the applicant.
b) When the annual salary of the applicant can be reasonably expected to equal $75,000 or more annually.
If you provide credit score information on a background report, what must you include?
a) A list of all the applicant’s creditors.
b) A statement about key factors adversely affecting the credit score.
c) The applicant’s full credit history.
d) A prediction of the applicant’s future financial stability.
b) A statement about key factors adversely affecting the credit score.
If an applicant claims information resulted from identity theft, how quickly must you prevent the reporting of that information?
a) Within 24 hours.
b) Within two business days.
c) Within four business days.
d) Within one week.
c) Within four business days
What is required to block information resulting from identity theft?
a) A verbal claim from the applicant.
b) Proof of the identity of the applicant, an identity theft report, identification of the adverse information, and a statement that the information is not relating to a transaction by the applicant.
c) Just a name and address from the applicant.
d) A notarized letter from a friend of the applicant.
b) Proof of the identity of the applicant, an identity theft report, identification of the adverse information, and a statement that the information is not relating to a transaction by the applicant.
Who must you notify if information may be a result of identity theft?
a) The applicant’s employer.
b) The furnisher of information.
c) The police department.
d) The applicant’s family members.
b) The furnisher of information.
Under what condition can you refuse to block adverse information resulting from identity theft?
a) If the applicant is known to you personally.
b) If the information was blocked in error, or the consumer obtained goods as a result of the blocked transactions.
c) If the applicant doesn’t have a valid driver’s license.
d) If the applicant is from a different state.
b) If the information was blocked in error, or the consumer obtained goods as a result of the blocked transactions.
What is a duty of a “Furnisher of Information” under the FCRA?
a) Report inaccurate information to assist the client.
b) Report accurate information.
c) Ignore disputes reported by the applicant.
d) Share confidential information with competitors.
b) Report accurate information.
If an applicant disputes an item on a background report, what must the furnisher of information do?
a) Continue to report the item without change.
b) Not report the item unless they notify the background investigations company that the information is in dispute.
c) Automatically remove the disputed item.
d) Ignore the dispute.
b) Not report the item unless they notify the background investigations company that the information is in dispute.
What is the timeframe for providing the results of an investigation to the applicant after a dispute notice is received?
a) Within 10 days.
b) Within 20 days.
c) Within 30 days.
d) Within 45 days.
c) Within 30 days.
If you determine an applicant’s dispute is frivolous or irrelevant, what must you do?
a) Ignore the dispute and don’t respond.
b) Notify the applicant no later than five business days after your determination, including the reasons and any required information to investigate the dispute.
c) Publicly post the applicant’s information.
d) Sue the applicant for wasting your time.
b) Notify the applicant no later than five business days after your determination, including the reasons and any required information to investigate the dispute.
