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When employers conduct a check of your background (credit, criminal, past employer) using a third party, the background check is covered by The Fair Credit Reporting Act (FCRA). The FCRA defines a background check as a consumer report. Before an employer can get a consumer report for employment purposes, they must notify you in writing and get your written consent.

If an employer decides not to hire you because of your report, they must give you a pre-adverse action disclosure that includes a copy of the report and a copy of your rights. They must then give you notice that they have decided not to hire you and let you know the name and address of Consumer Reporting Agency and information on your right to dispute the report.

Reference:  About.com