On September 12, 2018, the Consumer Financial Protection Bureau released a new model of the disclosure document, “A Summary of Your Rights Under the Fair Credit Reporting Act.” Under the Fair Credit Reporting Act, employers must provide this disclosure to job applicants prior to taking any adverse action against the applicant based on a consumer report, or as more commonly known, a background check. The updated form incorporates notices regarding the new national security freeze rights which allow for more consumer protection against theft.
This requirement became effective on September 21, 2018. Employers are highly encouraged to download the new model form, available on the Consumer Financial Protection Bureau’s website, and discard any remaining outdated forms. Although the Credit Reporting Agency providing the report should also provide the employer with the summary of rights with the consumer report, it need not do so if it had previously provided the employer with the summary. If employers do not download the new form themselves and discard the old forms, they may be providing applicants with inadequate disclosures. Failure to provide adequate disclosures may be disastrous for the employer in litigation because it is the employer’s obligation to provide the disclosures when taking adverse action.
Background checks are a regular part of the employment process. To ensure proper compliance with the Fair Credit Reporting Act, employers should review their disclosure forms to ensure they contain the required notices or speak with an employment attorney at Mesch Clark Rothschild.
If you have any questions, please email me at tcope@mcrazlaw.com.
