The Insurance Journal reports that the Supreme Court has ruled in favor of two insurance companies, GEICO and Safeco. The companies were accused of violating the Fair Credit Reporting Act (FCRA).

There were actually two rulings. Even though they don’t relate directly and specifically to background checks or tenant screening, there are still important things here for you.

The Court ruled that GEICO did not violate the FCRA. The company had used a credit check to in the process of determining what rate to charge a customer, but it did not affect the final rate offered.

In the case of Safeco, the court ruled that they had violated the law, but they had not done so recklessly. The court ruling means that both GEICO and Safeco have escaped having to pay huge damage awards.

If you’re using credit checks as part of your employee or tenant background check process, there are some things to pay attention to.

The reason that this was a big deal is that the government takes the FCRA seriously and more and more the people you will be screening know about it. You can get in big trouble if you don’t do things right.

If you’re in doubt about what you need to do, check out some of the resources on this blog. One resource is Understanding FCRA rules for employment screening.

You could look at these rulings and figure that you’re going to be all right as long as you’re not “reckless” in the way you use credit information. That would be a mistake.

The FCRA treats insurance companies differently from employers and landlords. You have to follow the rules that apply to you. You can’t just do things according to the law. You also have to appear to be doing them that way.

The big take-away on this for employers and landlords is that getting on the wrong side of the FCRA can get you sued and cost you money for legal fees and damages, not to mention the time you’ll put in. So, find out what the rules are. Then follow them.

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