What Is Adverse Action? A Plain-English Guide for Nonprofits (2026)
Adverse action is the FCRA process you must follow before turning down a volunteer because of a background check. Here’s the meaning, the exact steps, and how to do it right.
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If you’ve ever run a background check and wondered “what am I actually allowed to do if something comes back?”, the answer lives in a term called adverse action. It’s one of the most important — and most misunderstood — steps in volunteer screening.
Adverse action — definition
Adverse action is any decision that denies someone a role — or takes an unfavorable step — based in whole or in part on information in a background check (a “consumer report”). Under the Fair Credit Reporting Act (FCRA), you must follow a specific notice process before and after making that decision.
Why adverse action exists
Background checks aren’t perfect. Records get mismatched to the wrong person, dispositions get recorded incorrectly, and old items sometimes surface that shouldn’t. The adverse-action process exists to give a person a fair chance to see the report and dispute mistakes before a final decision is locked in. It applies to volunteers screened through a consumer reporting agency, not just employees.
The adverse-action steps
- Pre-adverse action notice. Before you decide, send the applicant a notice that you’re considering declining them based on their report. Include a copy of the report and the CFPB “A Summary of Your Rights Under the FCRA.”
- Wait a reasonable period. Give them time to respond or dispute — commonly at least five business days. Don’t finalize during this window.
- Final adverse action notice. If you still decide to decline, send the final notice with the CRA’s contact info, a statement that the CRA didn’t make the decision, and the applicant’s right to a free report and to dispute.
Common mistakes to avoid
- Auto-rejecting on any record. Assess each record’s relevance to the specific role — a decades-old, unrelated item usually shouldn’t disqualify someone from every position.
- Skipping the waiting period. Sending both notices the same day defeats the purpose and creates risk.
- Being inconsistent. Apply the same process to every applicant for a given role.
How VolunteerBadge handles it
Every VolunteerBadge check is handled under the FCRA, and the platform generates the pre-adverse and final adverse-action notices for you — with the report copy and Summary of Rights attached — so the process is done correctly without legal guesswork. A trained reviewer also examines every potential record by hand before it ever reaches you. See the adverse-action workflow →
Related: What is a consumer report? · What is the FCRA? · The full screening glossary
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