Employers: Update Your Summary of Rights Form for Background Checks

Pursuant to new regulations, employers must disclose additional information to applicants and employees before conducting background checks.

In May 2018, Congress enacted the Economic Growth, Regulatory Relief, and Consumer Protection Act (the “Act”). The Act requires consumer reporting agencies to provide “national security freezes” to consumers free of charge. The Act also extended the 90-day period to one year for which national consumer reporting agencies must include an initial fraud alert in a consumer’s file.

The Act also provides that whenever the Fair Credit Report Act (“FCRA”) requires an entity to provide a consumer with a “Summary of Consumer Rights,” the new requirements must be included in the notice to the consumer. Because the FCRA classifies applicants and employees as “consumers,” employers are now required to provide applicants and employees notice of their right to obtain a security freeze and the change in duration for initial fraud alerts before conducting a background check.

In response to the new requirements, the Consumer Financial Protection Bureau (CFPB) updated its model “Summary of Consumer Rights.” The model form became effective September 21, 2018. Employers are temporarily permitted to continue using the 2012 form if a separate page containing the new information is attached. Employers must ensure that they update their forms to avoid potential legal liability for non-compliance.

The revised Summary of Consumer Rights is offered as a Word document that can be viewed or downloaded at this link (link opens in new window): https://files.consumerfinance.gov/f/documents/bcfp_consumer-rights-summary_2018-09.docx

Please contact David Paxton or any member of Gentry Locke’s Employment Law Team if we can help your business understand its obligations under the FCRA or other employment laws that govern your business.