Updated Fair Credit Reporting Act Forms Target Identity Theft
Author: David B. Weisenfeld, XpertHR Legal Editor
September 21, 2018
Effective today, employers and background check companies should begin using two updated Fair Credit Reporting Act (FCRA) model forms, the Summary of Consumer Rights Under FCRA and the Summary of Consumer Rights Identity Theft forms. The Consumer Finance Protection Bureau (CFPB) had issued an interim final rule last week updating these notice requirements.
The updated forms stem from the Economic Growth, Regulatory Relief and Consumer Protection Act, a new law Congress passed in May in response to a series of data breaches. The Act requires consumer reporting agencies to provide at no cost a national security freeze to consumers who believe they have been the victim of identity theft or fraud. It also extends from 90 days to one year the minimum time that consumer reporting agencies must include an initial fraud alert in a consumer's file.
FCRA establishes nationwide standards for employment screenings performed by outside companies - consumer reporting agencies. Before taking any adverse action against a job applicant or employee under FCRA based on a consumer credit report obtained from one of these agencies, an employer must provide the individual with a summary of his or her rights. This summary of rights should be provided within three days of requesting an investigative consumer report from a consumer reporting agency.
The updated disclosure forms mandate that when FCRA requires an individual to receive a Summary of Consumer Rights Under FCRA that a notice regarding the individual's security freeze right also be included.
An employer may still use the model forms published by the CFPB on November 14, 2012, so long as a separate page containing the required security freeze rights notice is included in the same transmittal.