CODESP Background and Reference Investigations 2 — Questions and Answers
Question 1: Under the Fair Credit Reporting Act (FCRA), how far back can a consumer reporting agency report bankruptcies?
- 7 years
- 10 years (Correct answer)
- 15 years
- Indefinitely
Correct answer: 10 years
Under FCRA, bankruptcies may be reported for up to 10 years from the date of filing.
Question 2: Which of the following best describes a 'release of information' form used in background investigations?
- A court order requiring disclosure of criminal records
- A signed authorization allowing employers to obtain personal information from third parties (Correct answer)
- A document waiving all liability for the investigator
- An agency agreement between two employers sharing candidate data
Correct answer: A signed authorization allowing employers to obtain personal information from third parties
A release of information form is a signed authorization from the candidate allowing the employer to obtain records and references from third parties.
Question 3: When verifying a candidate's prior employment, what is the most appropriate action if a previous employer only confirms dates of employment and job title?
- Reject the candidate due to uncooperative references
- Accept the information provided and document it accurately (Correct answer)
- Attempt to obtain the information through a third-party records broker without consent
- Require the candidate to resubmit the application
Correct answer: Accept the information provided and document it accurately
Many employers have policies limiting what they disclose; the investigator should document the verified information and note any limitations encountered.
Question 4: Which federal law prohibits employers from using background check information to discriminate based on national origin?
- The Privacy Act of 1974
- Title VII of the Civil Rights Act of 1964 (Correct answer)
- The Employee Polygraph Protection Act
- The Occupational Safety and Health Act
Correct answer: Title VII of the Civil Rights Act of 1964
Title VII of the Civil Rights Act of 1964 prohibits employment discrimination based on national origin, race, color, religion, and sex.
Question 5: In the context of reference checks, a structured reference interview is preferred because it:
- Allows the investigator to ask any question that comes to mind
- Provides consistent, job-related questions asked of all references (Correct answer)
- Enables the investigator to gather personal opinions about the candidate's lifestyle
- Reduces the time spent on each reference call
Correct answer: Provides consistent, job-related questions asked of all references
Structured reference interviews ensure consistency and job-relatedness, reducing bias and supporting defensible hiring decisions.
Question 6: What does the term 'adverse action' mean in the context of FCRA and background investigations?
- A criminal conviction discovered during the investigation
- Any action taken against a candidate that negatively affects their employment opportunity based on a consumer report (Correct answer)
- A reference who refuses to provide information
- A discrepancy found between a resume and verified records
Correct answer: Any action taken against a candidate that negatively affects their employment opportunity based on a consumer report
Adverse action under FCRA refers to denying employment or taking other negative action based on information in a consumer report, requiring specific notification procedures.
Question 7: Which of the following is an example of a red flag that might warrant additional scrutiny during a background investigation?
- A candidate who has worked at many companies over a 20-year career
- Unexplained gaps in employment history that the candidate cannot account for (Correct answer)
- A candidate who has lived in multiple states
- References who are former supervisors rather than coworkers
Correct answer: Unexplained gaps in employment history that the candidate cannot account for
Unexplained employment gaps may indicate undisclosed terminations, incarceration, or other relevant circumstances warranting follow-up.
CODESP Background and Reference Investigations 2
Under the Fair Credit Reporting Act (FCRA), how far back can a consumer reporting agency report bankruptcies?