FCRA Basic Certification Practice Exam 2025 - Free FCRA Certification Practice Questions and Study Guide

An employer must follow adverse action procedures specifically when they take an employment action, such as firing or denying a promotion, based on information contained in a consumer report. This requirement is established under the Fair Credit Reporting Act (FCRA), which mandates that employers provide notice to the individual and a summary of their rights when an adverse action is made based on a consumer report.

This process ensures transparency and fairness for the individual affected, allowing them the opportunity to dispute or clarify any potentially harmful information contained within the report. It's crucial for employers to adhere to these procedures to comply with FCRA regulations and protect the rights of applicants and employees.

The context of consumer reports is significant here, as the adverse action procedures are tied specifically to the information derived from these reports, rather than general employment decisions. Therefore, the correct scenario involves instances when an employer fires an employee based on the contents of a consumer report.