Employers Must Start Using Updated FCRA Form

Effective September 21, 2018, employers using third party “consumer reporting agencies” to perform background checks must now provide job applicants with a new “Summary of Your Rights Under the Fair Credit Reporting Act.”  The Summary is normally given to job candidates prior to running a background check, and before taking “adverse action,” such as a denial of employment.  Current employees are also eligible to receive the form prior to any adverse action being taken as a result of a third-party background check conducted during employment. The new form is required under the Economic Growth, Regulatory Relief, and Consumer Protection Act passed in May 2018.

The key change is the addition of language notifying recipients of their right to have nationwide credit reporting agencies place a “security freeze” on their credit report at no cost. Such freezes are designed to prevent identity fraud by limiting a prospective lender’s access to a consumer’s credit report. A copy of the new form can be found here.