Conduct a Business Background Check

A business background check is the process of obtaining information about any business organization and is mostly done by customers and prospective business partners. Business background check also refers to employee background checks that are done by the employers before recruiting any individual.

Business houses before going into mergers or partnerships with one another, conduct a business background check to know about the bankruptcy records. The report also tells about past mergers and their dissolutions.

FCRA

The Fair Credit Reporting Act regulates all laws in relation to business background check in the United States of America. The main aim of the Fair Credit Reporting Act is to ensure that the reports that are used by business houses before big business decisions or before employing new people as a pre-employment screening is correct and preserves the rights of both the parties.

Under the Fair Credit Reporting Act, a consumer report contains information about the person’s credit history, his or her general character and the source from which the information about the subject is collected. In case of business organizations, it tells whether the company had ever filed for bankruptcy, the credit worthiness of the company, and the merger records of the company and so on.

The FCRA states that a few steps have to be taken by the person or organization conducting a background report and also by the individual who prepares it. These are:

1. If you have requested for a business background check, you must inform the subject about this within three days after you forward your request.
2. If the subject wishes to receive any further information, you must furnish a formal disclosure within 5 days. The disclosure should inform the individual how to procure a copy of the record.
3. You must give the subject a statement declaring his or her right to request for further details.

SBA

The small businesses often require background check reports in the industry. The federal Small Business Administration or SBA helps small businesses in this matter. The Small Business Administration offers a number of financial opportunities to the small businesses. The most common form of assistance that the SBA provides is in the form of guaranties for loans. This requires a business background check.

There are companies that conduct background checks for small business owners. It is mandatory for all to follow the Fair Credit Reporting Act and follow all the required legal procedures and produce accurate information.

Any outside company wanting to conduct a business background check must seek the consent of the applicant or the subject. The FCRA also allows subjects to get a free copy of the consumer report.

In case of inaccurate information in the background report, the FCRA gives the subject the right to dispute any inadequate or incorrect information.

The Fair Credit Reporting Act helps in maintaining a balance in the process of conducting background checks. Business background checks are a way to protect the business from improper deals. Failure to align oneself with the FCRA may subject the person looking for a report to civil liabilities.