Employers must use an updated form in order to comply with the Fair Credit Reporting Act (“FCRA”), which covers background checks for job applicants and existing employees. The new form is for use effective January 1, 2013. No other provisions of the FCRA have changed.

The FCRA Regulates the Use of Consumer Information

The FCRA regulates the use of consumer information. Consumer Reporting Agencies (“CRAs”) compile consumer information into detailed “consumer reports,” which may be used by employers for hiring and retention decisions. Employers also may conduct their own investigative consumer reports, which are covered by the Act as well. The FCRA provides notice and authorization requirements for the use of consumer reports and investigative consumer reports.

New Form is a Result of New Agency Overseeing Compliance with the FCRA

The revised form, “A Summary of Your Rights Under the Fair Credit Reporting Act” (required by the FCRA to obtain authorization for and notice of consumer reports being conducted), has been updated and reflects the transfer of enforcement powers under the FCRA from the Federal Trade Commission (“FTC”) to the Consumer Financial Protection Bureau (“CFPB”). Essentially, the revised form replaces references to the FTC with references to the CFPB, and updates the contact details accordingly. The form is available in a PDF format on the CFPB website. By scrolling through the pages, one can click the link to the form “A Summary of Your Rights Under the Fair Credit Reporting Act.” It is also attached here in PDF format.

Using “A Summary of Your Rights Under the Fair Credit Reporting Act”

An employer must provide an employee/potential employee with the form “A Summary of Your Rights Under the Fair Credit Reporting Act” before taking any adverse action based on a consumer report regarding an applicant/employee. This report may be obtained following separate written notice to, and written permission from, the applicant/employee. Further, the form also must be provided to an applicant/employee before an employer obtains an “investigative consumer report” on an applicant/employee. An investigative report is more detailed, and somewhat more intrusive, than an consumer report because it seeks information concerning a consumer’s character, general reputation, personal characteristics or mode of living, and is obtained through personal interviews with that consumer’s neighbors, friends, associates or acquaintances.

For answers regarding matters involving compliance with the FCRA’s regulation of employment background checks, please feel free to contact any attorney in the Gibbons Employment & Labor Department.

Mitchell Boyarsky is a Director in the Gibbons Employment & Labor Law Department.