Glossary of Common Terms
Adverse Action. An action which may result in a negative impact on a consumer's ability to secure housing, credit or employment.
The term “adverse action” has the same meaning as in section 701(d)(6) of the Equal Credit Opportunity Act; and means a denial or cancellation of, an increase in the terms of coverage or amount of, any insurance, existing or applied for, in connection with the underwriting of insurance; a denial of employment or any other decision for employment purposes that adversely affects any current or prospective employee; a denial or cancellation of, an increase in any charge for, or any other adverse or unfavorable change in the terms of, any license or benefit described in section 604(a)(3)(D) [15 U.S.C. §1681b] of the FCRA; and any action taken or determination that is made in connection with an application that was made by, or a transaction that was initiated by, any consumer, or in connection with a review of an account under section 604(a)(3) (F)(ii) [15 U.S.C. §1681b] of the FCRA and adverse to the interests of the consumer.
Adverse Action Notice. If any person, individual, partnership, corporation, trust, estate, cooperative, association, government, governmental subdivision, agency or other entity takes any adverse action with respect to any consumer that is based in whole or in part on any information contained in a consumer report, they are required under the provisions of the Fair Credit Reporting Act (FCRA) to provide verbal, written, or electronic notice of the adverse action to the consumer. This notice must include:
- The name, address, and toll–free telephone number of the Consumer Reporting Agency that furnished the report
- A statement that the consumer reporting agency did not make the adverse decision
- Notice of the consumer’s right to obtain a free copy of a consumer report from the CRA that provided the consumer request within 60 days of the adverse action
- The consumer’s right to dispute with the CRA the accuracy or completeness of any information in the consumer file
Consumer File. A file that contains all information that a consumer reporting agency (CRA) maintains about a consumer and that may be reported on the consumer in the future.
Consumer Report. The information Credit Reporting Agencies (CRAs) provide creditors, employers, insurers, and other businesses
Consumer Reporting Agency (CRA). A consumer reporting agency is any individual, partnership, corporation, trust, estate, cooperative association, government or governmental subdivision or agency, or other entity which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports.
Credit Report. A report indicating a consumer’s credit history.
Defendant. A person who is the subject of legal action initiated by a plaintiff.
Disclosure. Providing the consumer with information in his/her consumer file.
Dispute. The consumer has the right to challenge information that he/she believes is inaccurate or incomplete. A consumer who disputes specific information contained in his or her consumer file may request a reinvestigation of his or her consumer file.
Due Diligence. The process of investigation carried on usually by a disinterested third party on behalf of a party contemplating a business transaction for the purpose of providing information with which to evaluate the advantages and risks involved.
End–user. A business that receives a consumer file and uses it to make housing or employment decisions based on the information contained in the file.
Fair Credit Reporting Act (FCRA). Federal legislation enforced by the Federal Trade Commission to promote accuracy and ensure the privacy of information used in consumer reports. The FCRA also provides regulations for consumer reporting agencies to follow with regards to consumers’ files.
Identity Fraud or Theft. A crime that occurs when a person uses someone else’s personal information to obtain credit or goods and services using another person's identity. For more information on Identity Fraud or Theft, visit the Federal Trade Commission’s Identity Theft Data Clearinghouse at www.ftc.gov/bcp/edu/microsites/idtheft/.
Inquiry. A customer request for a consumer report. An inquiry may only be obtained under permissible purposes as defined by the Fair Credit Reporting Act.
Jurisdiction. a) Power, authority, control. b) The territorial range of authority or control.
MVR. Motor Vehicle Report
Negligent Hiring. Negligent hiring is an employer’s failure to exercise “reasonable” caution when choosing an employee. Increasingly today, courts are holding employers financially and legally responsible for illegal or violent actions taken by employees against customers or co-workers. In effect, courts are saying that the employer is responsible to know or at least make an effort to know that the person they are hiring will not cause safety issues for those they may come into contact with as a result of their position.
Negligent hiring has to do with the failure to exercise “reasonable” care in the hiring process. The obvious question then becomes, “What constitutes reasonable care?” Unfortunately, there is no clear-cut standard answer for this question and there is little guidance given to employers at the County, State or Federal level. When the case is in front of a judge, that judge will make a determination based on an employer’s effort to responsibly hire. One factor that is important to note is that how thorough a check is conducted does have a direct correlation to what type of position is being filled.
With the low cost of running a Background Check, employers can be reasonably sure that they are protecting themselves by running Criminal Records Checks, SSN Traces, thoroughly checking references and verifying all other pertinent information about each candidate prior to making a job offer. By taking these steps, every employer should be able to clearly show that reasonable care was used in the hiring process. More importantly, it would be extremely difficult for anyone to argue that the employer knew or should have known that the information received was false.
Permissible Purpose. Legally allowable purposes for inquiring about a consumer’s personal information. These purposes include legitimate business needs such as housing or employment applications of the consumer, credit transactions, court orders and subpoenas.
Plaintiff. A person who brings legal action against another person.
Public Record Data. Any records that can be accessed by the general public, such as civil lawsuits and judgments as they relate to a consumer’s obligations.
Release Form. A document filled out and signed by the applicant giving authorization and consent to release and disclose any and all information provided by the applicant to the employer.
