Compliance

Table of Contents

KGI provides the information below solely for educational purposes. KGI is not providing legal advice. Information may change and become inaccurate.

If you have questions or concerns, please contact your legal counsel.

Compliance Notifications

Notice to Users of Consumer Reports: Obligations of Users Under the FCRA

All furnishers subject to the Consumer Financial Protection Bureau's jurisdiction must comply with all applicable regulations, including regulations promulgated after this notice was prescribed in 2004. Information about applicable regulations currently in effect can be found at the Bureau's Web site, www.consumerfinance.gov/learnmore. Furnishers who are not subject to the Bureau's jurisdiction should consult with their regulators to find any relevant regulations.

The Fair Credit Reporting Act (FCRA), 15 U.S.C. 1681-1681y, requires that this notice be provided to inform users of consumer reports of their legal obligations. State law may impose additional requirements. The text of the FCRA is set forth in full at the Consumer Financial Protection Bureau's Website at www.consumerfinance.gov/learnmore. At the end of this document is a list of United States Code citations for the FCRA. Other information about user duties is also available at the Bureau's Web site. Users must consult the relevant provisions of the FCRA for details about their obligations under the FCRA.

The first section of this summary sets forth the responsibilities imposed by the FCRA on all users of consumer reports. The subsequent sections discuss the duties of users of reports that contain specific types of information, or that are used for certain purposes, and the legal consequences of violations. If you are a furnisher of information to a consumer reporting agency (CRA), you have additional obligations and will receive a separate notice from the CRA describing your duties as a furnisher.

I. OBLIGATIONS OF ALL USERS OF CONSUMER REPORTS

A. Users Must Have a Permissible Purpose

Congress has limited the use of consumer reports to protect consumers' privacy. All users must have a permissible purpose under the FCRA to obtain a consumer report. Section 604 contains a list of the permissible purposes under the law. These are:

  • As ordered by a court or a federal grand jury subpoena. Section 604(a)(1)

  • As instructed by the consumer in writing. Section 604(a)(2)

  • For the extension of credit as a result of an application from a consumer, or the review or collection of a consumer's account. Section 604(a)(3)(A)

  • For employment purposes, including hiring and promotion decisions, where the consumer has given written permission. Sections 604(a)(3)(B) and 604(b)

  • For the underwriting of insurance as a result of an application from a consumer. Section 604(a)(3)(C)

  • When there is a legitimate business need, in connection with a business transaction that is initiated by the consumer. Section 604(a)(3)(F)(i)

  • To review a consumer's account to determine whether the consumer continues to meet the terms of the account. Section 604(a)(3)(F)(ii)

  • To determine a consumer's eligibility for a license or other benefit granted by a governmental instrumentality required by law to consider an applicant's financial responsibility or status. Section 604(a)(3)(D)

  • For use by a potential investor or servicer, or current insurer, in a valuation or assessment of the credit or prepayment risks associated with an existing credit obligation. Section 604(a)(3)(E)

  • For use by state and local officials in connection with the determination of child support payments, or modifications and enforcement thereof. Sections 604(a)(4) and 604(a)(5)

In addition, creditors and insurers may obtain certain consumer report information for the purpose of making "prescreened" unsolicited offers of credit or insurance. Section 604(c). The particular obligations of users of "prescreened" information are described in Section VII below.

B. Users Must Provide Certifications

Section 604(f) prohibits any person from obtaining a consumer report from a consumer reporting agency (CRA) unless the person has certified to the CRA the permissible purpose(s) for which the report is being obtained and certifies that the report will not be used for any other purpose.

C. Users Must Notify Consumers When Adverse Actions Are Taken

The term "adverse action" is defined very broadly by Section 603. "Adverse actions" include all business, credit, and employment actions affecting consumers that can be considered to have a negative impact as defined by Section 603(k) of the FCRA – such as denying or canceling credit or insurance, or denying employment or promotion. No adverse action occurs in a credit transaction where the creditor makes a counteroffer that is accepted by the consumer.

1. Adverse Actions Based on Information Obtained From a CRA

If a user takes any type of adverse action as defined by the FCRA that is based at least in part on information contained in a consumer report, Section 615(a) requires the user to notify the consumer. The notification may be done in writing, orally, or by electronic means. It must include the following:

  • The name, address, and telephone number of the CRA (including a toll-free telephone number, if it is a nationwide CRA) that provided the report.

  • A statement that the CRA did not make the adverse decision and is not able to explain why the decision was made.

  • A statement setting forth the consumer's right to obtain a free disclosure of the consumer's file from the CRA if the consumer makes a request within 60 days.


A statement setting forth the consumer's right to dispute directly with the CRA the accuracy or completeness of any information provided by the CRA.

2. Adverse Actions Based on Information Obtained From Third Parties Who Are Not Consumer Reporting Agencies

If a person denies (or increases the charge for) credit for personal, family, or household purposes based either wholly or partly upon information from a person other than a CRA, and the information is the type of consumer information covered by the FCRA, Section 615(b)(1) requires that the user clearly and accurately disclose to the consumer his or her right to be told the nature of the information that was relied upon if the consumer makes a written request within 60 days of notification. The user must provide the disclosure within a reasonable period of time following the consumer's written request.

3. Adverse Actions Based on Information Obtained From Affiliates

If a person takes an adverse action involving insurance, employment, or a credit transaction initiated by the consumer, based on information of the type covered by the FCRA, and this information was obtained from an entity affiliated with the user of the information by common ownership or control, Section 615(b)(2) requires the user to notify the consumer of the adverse action. The notice must inform the consumer that he or she may obtain a disclosure of the nature of the information relied upon by making a written request within 60 days of receiving the adverse action notice. If the consumer makes such a request, the user must disclose the nature of the information not later than 30 days after receiving the request. If consumer report information is shared among affiliates and then used for an adverse action, the user must make an adverse action disclosure as set forth in I.C.1 above.

D. Users Have Obligations When Fraud and Active Duty Military Alerts are in Files

When a consumer has placed a fraud alert, including one relating to identity theft, or an active duty military alert with a nationwide consumer reporting agency as defined in Section 603(p) and resellers, Section 605A(h) imposes limitations on users of reports obtained from the consumer reporting agency in certain circumstances, including the establishment of a new credit plan and the issuance of additional credit cards. For initial fraud alerts and active duty alerts, the user must have reasonable policies and procedures in place to form a belief that the user knows the identity of the applicant or contact the consumer at a telephone number specified by the consumer; in the case of extended fraud alerts, the user must contact the consumer in accordance with the contact information provided in the consumer's alert.

E. Users Have Obligations When Notified of an Address Discrepancy

Section 605(h) requires nationwide CRAs, as defined in Section 603(p), to notify users that request reports when the address for a consumer provided by the user in requesting the report is substantially different from the addresses in the consumer's file. When this occurs, users must comply with regulations specifying the procedures to be followed, which will be issued by the Consumer Financial Protection Bureau and the banking and credit union regulators. The Consumer Financial Protection Bureau's regulations will be available at www.consumerfinance.gov/learnmore.

F. Users Have Obligations When Disposing of Records

Section 628 requires that all users of consumer report information have in place procedures to properly dispose of records containing this information. The Consumer Financial Protection Bureau, the Securities and Exchange Commission, and the banking and credit union regulators have issued regulations covering disposal. The Consumer Financial Protection Bureau's regulations may be found at www.consumerfinance.gov/learnmore.

II. CREDITORS MUST MAKE ADDITIONAL DISCLOSURES

If a person uses a consumer report in connection with an application for, or a grant, extension, or provision of, credit to a consumer on material terms that are materially less favorable than the most favorable terms available to a substantial proportion of consumers from or through that person, based in whole or in part on a consumer report, the person must provide a risk-based pricing notice to the consumer in accordance with regulations to be jointly prescribed by the Consumer Financial Protection Bureau and the Federal Reserve Board.

Section 609(g) requires a disclosure by all persons that make or arrange loans secured by residential real property (one to four units) and that use credit scores. These persons must provide credit scores and other information about credit scores to applicants, including the disclosure set forth in Section 609(g)(1)(D) ("Notice to the Home Loan Applicant").

III. OBLIGATIONS OF USERS WHEN CONSUMER REPORTS ARE OBTAINED FOR EMPLOYMENT PURPOSES

A. Employment Other Than in the Trucking Industry

If information from a CRA is used for employment purposes, the user has specific duties, which are set forth in Section 604(b) of the FCRA. The user must:

  • Make a clear and conspicuous written disclosure to the consumer before the report is obtained, in a document that consists solely of the disclosure, that a consumer report may be obtained.

  • Obtain from the consumer prior written authorization. Authorization to access reports during the term of employment may be obtained at the time of employment.

  • Certify to the CRA that the above steps have been followed, that the information being obtained will not be used in violation of any federal or state equal opportunity law or regulation, and that, if any adverse action is to be taken based on the consumer report, a copy of the report and a summary of the consumer's rights will be provided to the consumer.

  • Before taking an adverse action, the user must provide a copy of the report to the consumer as well as the summary of consumer's rights. (The user should receive this summary from the CRA.) A Section 615(a) adverse action notice should be sent after the adverse action is taken.

An adverse action notice also is required in employment situations if credit information (other than transactions and experience data) obtained from an affiliate is used to deny employment. Section 615(b)(2)

The procedures for investigative consumer reports and employee misconduct investigations are set forth below.

B. Employment in the Trucking Industry

Special rules apply for truck drivers where the only interaction between the consumer and the potential employer is by mail, telephone, or computer. In this case, the consumer may provide consent orally or electronically, and an adverse action may be made orally, in writing, or electronically. The consumer may obtain a copy of any report relied upon by the trucking company by contacting the company.

IV. OBLIGATIONS WHEN INVESTIGATIVE CONSUMER REPORTS ARE USED

Investigative consumer reports are a special type of consumer report in which information about a consumer's character, general reputation, personal characteristics, and mode of living is obtained through personal interviews by an entity or person that is a consumer reporting agency. Consumers who are the subjects of such reports are given special rights under the FCRA. If a user intends to obtain an investigative consumer report, Section 606 requires the following:

  • The user must disclose to the consumer that an investigative consumer report may be obtained. This must be done in a written disclosure that is mailed, or otherwise delivered, to the consumer at some time before or not later than three days after the date on which the report was first requested. The disclosure must include a statement informing the consumer of his or her right to request additional disclosures of the nature and scope of the investigation as described below, and the summary of consumer rights required by Section 609 of the FCRA. (The summary of consumer rights will be provided by the CRA that conducts the investigation.)

  • The user must certify to the CRA that the disclosures set forth above have been made and that the user will make the disclosure described below.

  • Upon the written request of a consumer made within a reasonable period of time after the disclosures required above, the user must make a complete disclosure of the nature and scope of the investigation. This must be made in a written statement that is mailed, or otherwise delivered, to the consumer no later than five days after the date on which the request was received from the consumer or the report was first requested, whichever is later in time.

V. SPECIAL PROCEDURES FOR EMPLOYEE INVESTIGATIONS

Section 603(x) provides special procedures for investigations of suspected misconduct by an employee or for compliance with Federal, state or local laws and regulations or the rules of a self-regulatory organization, and compliance with written policies of the employer. These investigations are not treated as consumer reports so long as the employer or its agent complies with the procedures set forth in Section 603(x), and a summary describing the nature and scope of the inquiry is made to the employee if an adverse action is taken based on the investigation.

VI. OBLIGATIONS OF USERS OF MEDICAL INFORMATION

Section 604(g) limits the use of medical information obtained from consumer reporting agencies (other than payment information that appears in a coded form that does not identify the medical provider). If the information is to be used for an insurance transaction, the consumer must give consent to the user of the report or the information must be coded. If the report is to be used for employment purposes – or in connection with a credit transaction (except as provided in regulations issued by the banking and credit union regulators) – the consumer must provide specific written consent and the medical information must be relevant. Any user who receives medical information shall not disclose the information to any other person (except where necessary to carry out the purpose for which the information was disclosed, or as permitted by statute, regulation, or order).

VII. OBLIGATIONS OF USERS OF "PRESCREENED" LISTS

The FCRA permits creditors and insurers to obtain limited consumer report information for use in connection with unsolicited offers of credit or insurance under certain circumstances. Sections 603(l), 604(c), 604(e), and 615(d). This practice is known as "prescreening" and typically involves obtaining from a CRA a list of consumers who meet certain preestablished criteria. If any person intends to use prescreened lists, that person must (1) before the offer is made, establish the criteria that will be relied upon to make the offer and to grant credit or insurance, and (2) maintain such criteria on file for a three-year period beginning on the date on which the offer is made to each consumer. In addition, any user must provide with each written solicitation a clear and conspicuous statement that:

  • Information contained in a consumer's CRA file was used in connection with the transaction.

  • The consumer received the offer because he or she satisfied the criteria for credit worthiness or insurability used to screen for the offer.

  • Credit or insurance may not be extended if, after the consumer responds, it is determined that the consumer does not meet the criteria used for screening or any applicable criteria bearing on credit worthiness or insurability, or the consumer does not furnish required collateral.

  • The consumer may prohibit the use of information in his or her file in connection with future prescreened offers of credit or insurance by contacting the notification system established by the CRA that provided the report. The statement must include the address and toll-free telephone number of the appropriate notification system.

In addition, once the Consumer Financial Protection Bureau by rule has established the format, type size, and manner of the disclosure required by Section 615(d), users must be in compliance with the rule. The CFPB's regulations will be at www.consumerfinance.gov/learnmore.

VIII. OBLIGATIONS OF RESELLERS

A. Disclosure and Certification Requirements

Section 607(e) requires any person who obtains a consumer report for resale to take the following steps:

  • Disclose the identity of the end-user to the source CRA.

  • Identify to the source CRA each permissible purpose for which the report will be furnished to the end-user.

  • Establish and follow reasonable procedures to ensure that reports are resold only for permissible purposes, including procedures to obtain:
    (1) the identity of all end-users;
    (2) certifications from all users of each purpose for which reports will be used; and
    (3) certifications that reports will not be used for any purpose other than the purpose(s) specified to the reseller. Resellers must make reasonable efforts to verify this information before selling the report.

B. Reinvestigations by Resellers

Under Section 611(f), if a consumer disputes the accuracy or completeness of information in a report prepared by a reseller, the reseller must determine whether this is a result of an action or omission on its part and, if so, correct or delete the information. If not, the reseller must send the dispute to the source CRA for reinvestigation. When any CRA notifies the reseller of the results of an investigation, the reseller must immediately convey the information to the consumer.

C. Fraud Alerts and Resellers

Section 605A(f) requires resellers who receive fraud alerts or active duty alerts from another consumer reporting agency to include these in their reports.

IX. LIABILITY FOR VIOLATIONS OF THE FCRA

Failure to comply with the FCRA can result in state government or federal government enforcement actions, as well as private lawsuits. Sections 616, 617, and 621. In addition, any person who knowingly and willfully obtains a consumer report under false pretenses may face criminal prosecution. Section 619.

The CFPB's Web site, www.consumerfinance.gov/learnmore, has more information about the FCRA, including publications for businesses and the full text of the FCRA.

Important Notice Affecting End Users Doing Business with Vermont Residents

Notice of Requirement for Consumer Consent

Under Vermont law, no one may access a Vermont consumer's credit report without obtaining the consumer's permission except under the following limited circumstances:

(A) in response to the order of a court having jurisdiction to issue such an order;

(B) for direct mail offers of credit (prescreening), as permitted by the FCRA;

(C) for the purpose of reviewing an account, increasing the credit line on the account, taking collection action on the account, or for other legitimate purposes associated with the account, if the consumer has given ongoing permission to obtain reports in connection with an existing credit relationship;

(D) where the request for a credit report is related to an education loan made, guaranteed, or serviced by the Vermont Student Assistance Corporation;

(E) where the request for a credit report is by the Office of Child Support Services when investigating a child support case;

(F) where the request for a credit report is related to a credit transaction entered into prior to January 1, 1993; or

(G) where the request for a credit report is by the Vermont State Tax Department and is used for the purpose of collecting or investigating delinquent taxes.

If you have obtained consent from the consumer to receive their credit report, the report may only be used for the purpose consented to by the consumer.


Based on the provisions in KGI's Terms and Conditions between KGI and your company, KGI will rely on your company's certification that credit reports will not be requested unless done so in compliance with Vermont and all other applicable law.

The Vermont statute above is provided to you with the intention of increasing awareness of your responsibilities under VT2480e(b) only. The notice is not meant to be an exhaustive representation of all Vermont laws affecting credit report users nor of your obligations under such laws. In short, it is not intended to provide you with, nor shall it be construed as, legal advice regarding Vermont law.

Should you have any questions about your or your institution's specific obligations under the FCRA or any related state law, we ask that you consult with your own legal counsel.

California Consumer Credit Reporting Legislation Data User / Furnisher Obligations

1785.11.1 (g) Any person who uses a consumer credit report in connection with the approval of credit based on an application for an extension of credit, or with the purchase, lease, or rental of goods or non-credit-related services and who receives notification of a security alert pursuant to subdivision (a) may not lend money, extend credit, or complete the purchase, lease, or rental of goods or non-credit-related services without taking reasonable steps to verify the consumer's identity, in order to ensure that the application for an extension of credit or for the purchase, lease, or rental of goods or non-credit-related services is not the result of identity theft. If the consumer has placed a statement with the security alert in his or her file requesting that identity be verified by calling a specified telephone number, any person who receives that statement with the security alert in a consumer's file pursuant to subdivision (a) shall take reasonable steps to verify the identity of the consumer by contacting the consumer using the specified telephone number prior to lending money, extending credit, or completing the purchase, lease, or rental of goods or non-credit-related services. If a person uses a consumer credit report to facilitate the extension of credit or for another permissible purpose on behalf of a subsidiary, affiliate, agent, assignee, or prospective assignee, that person may verify a consumer's identity under this section in lieu of the subsidiary, affiliate, agent, assignee, or prospective assignee.

(i) If reasonable steps are taken to verify the identity of the consumer pursuant to subdivision (b) of Section 1785.20.3, those steps constitute compliance with the requirements of this section, except that if a consumer has placed a statement including a telephone number with the security alert in his or her file, his or her identity shall be verified by contacting the consumer using that telephone number as specified pursuant to subdivision (g).

1785.11.4 The provisions of Sections 1785.11.1, 1785.11.2, and 1785.11.3 do not apply to a consumer credit reporting agency that acts only as a reseller of credit information pursuant to Section 1785.22 by assembling and merging information contained in the data base of another consumer credit reporting agency or multiple consumer credit reporting agencies, and does not maintain a permanent data base of credit information from which new consumer credit reports are produced. However, a consumer credit reporting agency acting pursuant to Section 1785.22 shall honor any security freeze placed on a consumer credit report by another consumer credit reporting agency.

1785.14 (2) If the prospective user is a retail seller, as defined in Section 1802.3, and intends to issue credit to a consumer who appears in person on the basis of an application for credit submitted in person, the retail seller certifies, in writing, to the consumer credit reporting agency that it instructs its employees and agents to inspect a photo identification of the consumer at the time the application was submitted in person. This paragraph does not apply to an application for credit submitted by mail.

(3) If the prospective user intends to extend credit by mail pursuant to a solicitation by mail, the extension of credit shall be mailed to the same address as on the solicitation unless the prospective user verifies any address change by, among other methods, contacting the person to whom the extension of credit will be mailed.

1802.3. "Retail seller" or "seller" means a person engaged in the business of selling goods or furnishing services to retail buyers.

1785.20.2. Any person who makes or arranges loans and who uses a consumer credit score as defined in Section 1785.15.1 in connection with an application initiated or sought by a consumer for a closed end loan or establishment of an open end loan for a consumer purpose that is secured by one to four units of residential real property shall provide the following to the consumer as soon as reasonably practicable:

(a) A copy of the information identified in subdivision (a) of Section 1785.15.1 that was obtained from a credit reporting agency or was developed and used by the user of the information. In addition to the information provided to it by a third party that provided the credit score or scores, a lender is only required to provide the notice contained in subdivision (d).

(b) If a person who is subject to this section uses an automated underwriting system to underwrite a loan, that person may satisfy the obligation to provide a credit score by disclosing a credit score and associated key factors supplied by a consumer credit reporting agency. However, if a numerical credit score is generated by an automated underwriting system used by an enterprise, and that score is disclosed to the person, it shall be disclosed to the consumer consistent with subdivision (c). For purposes of this subdivision, the term "enterprise" shall have the meaning provided in paragraph (6) of Section 4502 of Title 12 of the United States Code.

(c) A person subject to the provisions of this section who uses a credit score other than a credit score provided by a consumer reporting agency may satisfy the obligation to provide a credit score by disclosing a credit score and associated key factors supplied by a consumer credit reporting agency.

(d) A copy of the following notice, which shall include the name, address, and telephone number of each credit bureau providing a credit score that was used

FCRA Basics

The material presented here is for educational purposes only. KGI is not offering legal counsel. Please consult your legal counsel and/or compliance experts if you have questions or concerns.

FCRA Key Requirements

Prior to ordering a background check on an applicant, the FCRA requires the following:

  1. Applicant must be provided with a written disclosure which states the purpose of the background check.

  2. Applicant must be provided any applicable state disclosures.

  3. Employer/Property Manager must obtain the applicant's consent through a written authorization.

Disclosures

Under the FCRA, you cannot obtain a background report unless a clear and conspicuous disclosure has been made to the applicant. This disclosure must be a stand-alone document that consists solely of the disclosure and nothing else.

The employer/property manager must inform the applicant, in writing, of the purpose of the background check.

This must be done in a very clear way:

  • The disclosure cannot be within the application

  • The text must not be too small

  • It cannot be mixed in with information regarding the job position or property details.

Failure to provide the disclosure in a clear, conspicuous manner without "extraneous language" increases the potential of legal action against the employer or property manager.

State-Specific Disclosures

Some states require specific disclosures. It is your responsibility to ensure that the applicant receives the appropriate disclosures based on their address.

Consent/Release Forms

Prior to running a background check, you must obtain written authorization for a background check to be conducted on the applicant. This ensures the candidate is aware of the pending background check, understands the background check process, and understands they have rights under the FCRA and other laws.

How KGI Enforces These Rules

Reports Orders Placed by You

When you place an order in the KGI/Cloud system, you are prompted to accept an order certification, affirming that you understand your responsibilities under the FCRA:


Fair Credit Reporting Act – Customer Certification
By requesting a background check report from KGI you certify the following:
  • You have provided the applicant with a clear and conspicuous disclosure advising them that a background check report may be obtained for employment or rental purposes and have received their written authorization to obtain the report;
  • You will comply with any adverse action requirements as described in the Fair Credit Reporting Act, if applicable (15 U.S.C. §§ 1681b and 1681m); and
  • You will not use information contained in the background check report in violation of any applicable Federal or State equal opportunity law or regulation.

By accepting this prompt, you are certifying that your company is complying with your responsibilities under the FCRA. KGI reserves the right to audit your files to ensure compliance with the FCRA at any time.

Additionally, if you place an order using the QuickApp process, your applicant will be provided standard, address-specific disclosures and consent forms to sign electronically.

Lastly, if you place the order yourself without using QuickApp, you will be prompted to upload the applicant's disclosures and consent documents to the order.

Reports Ordered Manually

KGI requires that you provide the signed disclosures and consent forms that you provided to the applicants at the time of order. If KGI places an order on your behalf using applicant data you provided to us, we will not process the order without receiving complete disclosure and consent documents for the applicant.

Adverse Action

The material presented here is for educational purposes only. KGI is not offering legal counsel. Please consult your legal counsel and/or compliance experts if you have questions or concerns.

The Adverse Action Process

The FCRA requires a two-step process to ensure that information gathered during a background check is accurate. If the information is not accurate, the Adverse Action process allows the applicant to address the issue and have it corrected, if applicable.

"Adverse action" is defined as denial or rejection of the applicant's application based on information gathered in the background check process.

Pre-Adverse Action

This is written notice to an applicant that you may take adverse action against the applicant. This notification must include a copy of the applicant's background check which includes the derogatory information that may prompt adverse action by you, as well as a notice of the applicant's rights under the FCRA (Example)

You must then allow the applicant a reasonable amount of time to review and dispute their background report with KGI. Once KGI receives a dispute, we will re-check the data in question and either confirm the original information, or correct the information accordingly.

Adverse Action

If you decide not to accept the applicant because he/she does not or cannot effectively dispute the derogatory information that triggered the pre-adverse action process, then you must issue a final adverse action notice to the applicant in conjunction with notification of your adverse action (i.e. rejecting them for employment).

How KGI Manages Adverse Action Processes

The two-step Adverse Action Process is the responsibility of you as the applicant's potential employer or property manager. The KGI/Cloud system includes the tools you need to prepare, send, and manage both electronic and paper adverse action notices.

Additionally, KGI offers Adverse Action management to our Enterprise customers.

Ban-The-Box

The material presented here is for educational purposes only. KGI is not offering legal counsel. Please consult your legal counsel and/or compliance experts if you have questions or concerns.

What is Ban-the-Box?

Ban-The-Box laws prohibit employers from asking candidates "have you ever been convicted of a crime?" prior to an offer of employment.

Is KGI Compliant with Ban-The-Box Laws?

KGI expects that a background check will not be ordered until after an applicant has been presented and accepted an employment offer. Since Ban-the-Box laws prohibit employers from asking about criminal convictions prior to an offer of employment, generally these laws do not affect how KGI processes employment background checks.

As the employer making the hiring decision, you are responsible for ensuring that you follow appropriate local, state, and federal law regarding Ban-the-Box.

Equal Opportunity Employment Commission (EEOC)

The material presented here is for educational purposes only. KGI is not offering legal counsel. Please consult your legal counsel and/or compliance experts if you have questions or concerns.

EEOC Guidance

KGI unequivocally stands for equal treatment and consideration for all qualified applicants.

The EEOC provides the following guidance: Background Checks | EEOC.gov

State Laws & Reporting

The material presented here is for educational purposes only. KGI is not offering legal counsel. Please consult your legal counsel and/or compliance experts if you have questions or concerns.

Look-Back Time Windows

States Governed by the FCRA

Criminal convictions are always reportable if they are available in court records.

States with Laws Stricter than the FCRA

Multiple states have limited the reportable look-back period to seven (7) years. Of those states, some allow an exception for a longer look-back period provided the applicant is expected to surpass a certain salary threshold.

As of January 2021, these are the states with laws stricter than the FCRA:

  • California

  • Kansas ($20,000 salary threshold)

  • Maryland ($20,000 salary threshold)

  • Massachusetts

  • Montana

  • New Hampshire ($20,000 salary threshold)

  • New Mexico

  • New York ($25,000 salary threshold)

  • Texas ($75,000 salary threshold; back to age 18 for government agencies)

  • Washington ($20,000 salary threshold)

Reporting Look-Backs

Criminal Records

For non-Enterprise customers, and to minimize risk, by default KGI will only report seven (7) years of convictions.

If you are located in a state without stricter-than-FCRA laws, or your applicant meets the salary exemption thresholds of your state, you may request a second pass at a report for a longer look-back (additional fees apply). Contact us at care@kgi360.com, include your File Number and your requested look-back. Our compliance team will review your request and take appropriate action.

Enterprise customers may establish a set look-back period that fits within the FCRA and the laws of their state.

Other Records

The FCRA prohibits reporting any adverse information, other than criminal records in the manner described above, or bankruptcies (10 years) older than seven (7) years.