• Background Checks: Employers Must Update Fair Credit Reporting Act (FCRA) Summary of Consumer Rights Form
  • December 17, 2012 | Authors: Michael D. Kaufman; Kristina N. Klein
  • Law Firm: Troutman Sanders LLP - Atlanta Office
  • As of January 1, 2013, employers who use consumer agencies to conduct background checks on their applicants and employees must use updated versions of the FCRA’s Summary of Consumer Rights form.

    The updated version complies with changes implemented by the newly created Consumer Financial Protection Bureau (CFPB). Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), the CFPB replaces the Federal Trade Commission as the chief enforcer for most provisions of the FCRA. The updates to the FCRA Summary of Consumer rights form reflects this change, replaces references to the Federal Trade Commission, and lists the CFPB as the point of contact for questions regarding consumers’ rights under the FCRA. The updated model form is available at Appendix K of 12 C.F.R. § 1022, which can be accessed here and will likely be posted on the CFPB’s website, www.consumerfinance.gov, at the beginning of the year.

    As a reminder, when employers use consumer reports to make employment decisions, such as hiring, promotion and termination, they must comply with the FCRA. The term "consumer report" is defined broadly by the FCRA and includes criminal background reports, credit history reports and other background checks. Under the FCRA, the Summary of Consumer Rights form must be provided to an applicant or employee when, among other things, a pre-adverse action notice is sent.

    Until January 1, 2013, employers should continue to use the existing FCRA Summary of Consumer Rights Form. However, as soon as the New Year rolls in, the new Summary of Consumer Rights form must be used, which identifies the CFPB as the point of contact. With the increase in privacy concerns and state legislation protecting the off duty conduct of applicants and employees [see Off Duty Conduct article], as well as the Equal Employment Opportunity Commission’s guidance discouraging inquiries into arrests and convictions [see To Inquire or Not to Inquire], the New Year may also be a good time to evaluate your existing background check policies and procedures to ensure compliance with the FCRA and other applicable laws.