Can a Background Screening Company Report on Criminal Cases More Than Seven Years Old?

Even though the Fair Credit Reporting Act’s (FCRA)[1] provisions regulating background checks have been in effect since 1996 – 25 years – misconceptions still abound as to what criminal record information can be reported to a potential employer or landlord.

What is the FCRA’s 7-Year Look Back Period?

While most people have heard of the seven-year look back period, they usually don’t know that it is a feature of the FCRA or what records it applies to. Many people mistakenly believe that the seven-year rule prohibits background screening companies (the FCRA calls them “consumer reporting agencies” (CRA)) from reporting any criminal record that is more than seven years old. NOT TRUE.

The seven-year look back period only applies to arrest records. When the FCRA was first enacted the rule applied to both arrest and conviction records. That changed in 1998 when the FCRA was amended, removing conviction records from the restrictions of the seven-year rule.[2]

There is one exception to the seven-year rule. If you are offered a job that pays an annual salary of $75,000 or greater, the seven-year rule doesn’t apply. Say you were arrested for disorderly conduct on January 1, 2017. The charge was later dismissed. On January 2, 2024, you are offered a job paying $80,000 a year.  Under this scenario, there is no legal barrier to reporting the arrest.

How to Calculate 7-Year (Look Back) Period

Under the FCRA, the seven-year look back period runs from the date the “adverse” event took place. For an arrest records, it is the date the person was arrested or formal criminal charges were filed. It does not matter when the case was dismissed.

Record of a Deferred Prosecution

Under Illinois’ criminal sentencing guidelines there are several forms of probation that, if completed successfully (e.g., 710/410, TASC, Second Chance), do not result in a conviction. These sentences are sometimes referred to as “deferred” prosecutions. A common feature of a deferred prosecution is that the individual may be required to plead guilty to the crime.

Under the FCRA, a deferred prosecution is treated as a conviction when the individual pleads guilty – even though Illinois law says this isn’t a conviction. See Aldaco v. RentGrow, Inc., 921 F.3d 685 (7th Cir. 2019) (plaintiff refused rental property because she failed a background check; appeals court affirmed lower court ruling that found no FCRA violation in connection with reporting plaintiff’s battery arrest and supervision sentence).

Under Illinois’ Human Rights Act (HRA), 775 ILCS 5/2-103, it is an HRA violation for Illinois employers to use/consider a deferred prosecution (arrest) record when making a hiring or termination decision. The HRA does not regulate CRAs.

Record of an Arrest or a Conviction? A Case with Multiple Charges

Recently, I spoke to a woman who lost a job after a background check disclosed her 1999 arrest for armed violence. She insisted that the disclosure violated the FCRA’s seven-year rule, going so far as to file an EEOC claim against the CRA.

In the same case, the woman was charged and convicted of possession of a controlled substance. The seven-year rule doesn’t apply to the case because one charge resulted in a conviction. That said, had the prosecutor chosen to file separate cases (one charge per case), the seven-year rule would have barred the CRA from reporting the armed violence charge.

CRAs (and Employers) Continue to Run Afoul of the FCRA

Under the FCRA, CRAs are required to employ reasonable procedures to insure the accuracy of the information they report. Even though the law has been around for a quarter of a century, some CRAs and employers routinely ignore the law’s rules. Currently, the Consumer Financial Protection Bureau (CFPB) is responsible for filing civil enforcement actions against CRAs and employers who violate the FCRA.[3]

CRAs are supposed to ensure that the data they rely on is updated regularly. When they don’t, CRA risk reporting expunged and/or sealed record information.[4] It is devastating for a job applicant to have to explain that their criminal history was previously expunged or sealed, while at the same time facing accusations of lying about their background.

Conclusion

Today, fewer and fewer employers ask job applicants if they have a criminal record (of convictions). Rather, they prefer waiting until a conditional job offer is made to perform a background check.

For better or worse, employment-based background checks are here to stay. That’s why it’s vital that you know what your rights are under the FCRA.

[1] The FCRA is the federal law that regulates how background checks must be performed – whether the information sought is criminal, credit, employment/salary history, or bankruptcy discharges. This article will only discuss criminal record information.

[2] Currently, there are a handful of state laws that limit the look back period for convictions: California, Kansas, Massachusetts, Montana, New Hampshire, New Mexico, New York, and Washington. Some of these laws only apply to low wage positions.

[3] In addition to the CFPB, anyone who can prove s/he was harmed (e.g., lost a job offer) by the unlawful disclosure of a criminal record has an individual right to sue the CRA in federal court for civil damages.

[4] Due to this and other reoccurring problems, the CFPB recently released an advisory opinion to remind CRAs of their responsibilities under the FCRA and the consequences of failing to employ reasonable practices to insure the accuracy/legality of the information collected. https://www.consumerfinance.gov/rules-policy/final-rules/fair-credit-reporting-background-screening-2024/