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Coeus Global InfoAlert


Screening of Volunteers is for Employment Purposes Under the FCRA

In its newly issued staff report that updates its guidance under the Fair Credit Reporting Act (FCRA), the Federal Trade Commission (FTC) says that the term employment purposes includes “a nonprofit organization staffed in whole or in part by volunteers.” (See page 32 of the report.)

The sources cited in the footnote for this assertion do not support it. The first source cited there is Hoke v. Retail Credit Corp. in that case, the court construed the words employment, promotion, and reassignment in the definition of “employment purposes” have “specific meanings in the area of activities for the production of income.” By definition, volunteering is not an activity for the production of income.

The other two sources that the footnote cites, the Allison and Solomon information staff opinion letters, both deal with cases in which the activity in question was income-producing (independent truck drivers in Allison and title insurance agents in Solomon).

However, courts often defer to the FTC's guidance on matters under the FCRA.,
anyone who screens volunteers should consider immediately adopting the practices related to employment-purpose screening, including disclosure, authorization, and pre-adverse-action notices.

For more information on how this update may affect your program and how Coeus Global can help, please contact client services.

Coeus Global has ALWAYS instructed nonprofit organizations nationwide to implement fully FCRA compliant procedures as a part of their volunteer recruitment process.

All services we offer to our nationwide nonprofit client base are FULLY COMPLIANT with all FCRA, State and local regulations.

Please note that we are not a law firm and do not provide legal advice. We see our role as providing you information that helps our customers? business people and legal people identify compliance requirements and legal risks that they might not be familiar with. Where you see compliance requirements or legal risks that apply to your organization, you should talk with your own lawyers experienced in the relevant law. Put another way, this information can be a starting point or a check point, but not an end point. Additionally, the courts, legislatures, and industries discussed in our compliance updates are evolving rapidly. That means that our compliance updates may be out of date very quickly. We do not update old compliance updates and don?t necessarily issue new ones even when we no longer agree with our former analysis. When you read any of our compliance updates that are more than a few months old, you should take special care to have your own lawyers perform up-to-date research.


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