Bureau Updates Summary of Your Rights Under the FCRA

Recently, the Consumer Financial Protection Bureau (CFPB) published an updated version of its notice, A Summary of Your Rights Under the Fair Credit Reporting Act (Summary of Your Rights Under the FCRA). The updated notice replaces the previous version published in October 2018. Employers have roughly a year to update their required postings to reflect the changes. Specifically, the Fair Credit Reporting Act (FCRA) governs access to consumer credit report records and allows individuals to verify the accuracy of such reports. In the employment realm, the FCRA often applies during interviewing, hiring, and background checks. The federal government has recently focused heavily on securing the privacy of personally identifiable information (PII) under various laws. In February 2023, an employer paid a $1.25 million settlement after a cybersecurity breach exposed data covered by the Health Insurance Portability and Accountability Act of 1996.

Rights Under the FCRA

When employers use third-party consumer reports during pre-employment background checks, they must comply with the FCRA. The FCRA protects information collected by consumer reporting agencies. FCRA consumer reports may contain the following information about applicant or job candidate:

• creditworthiness and standing,
• criminal history reports,
• driving records, and
• general reputation and character.

Under the FCRA, access to this information is restricted to parties that have a purpose specified under the law itself. Furthermore, employers that use any information the FCRA covers must notify the employee in writing that they will use such information. Notification must also be provided whenever employers take an adverse action based on information in a report. Several other provisions in the FCRA relate to record accuracy and identity theft. Finally, under the FCRA, employees and applicants have a right to obtain a copy of their consumer report and to dispute information therein.

Updates to Summary of Your Rights Under the FCRA

Changes to the Summary of Your Rights Under the FCRA notice include important corrections to contact information for federal agencies. Additionally, the revised notice provides updated references to obsolete business types and other technical corrections. Employers must provide the updated Summary of Your Rights Under the FCRA notice to applicants and employees along with any pre-adverse action notice based on a finding in a background check. Both English and Spanish versions of the updated notice are available on the CFPB’s website.

Employer Takeaways

Barring any further corrections from the CFPB, employers must update their current Summary of Your Rights Under the FCRA notice by March 20th, 2024. FCRA violations can result in costly litigation. Therefore, employers should also take this opportunity to review background check policies and procedures for compliance with the FCRA. Finally, the Summary of Your Rights Under the FCRA notice is only one of the required notices or labor law posters businesses must provide. Employers should review their workplace postings to ensure they are in compliance with federal and state posting requirements overall.