Employers and Background Check Companies Must Distribute New Model “Summary of Rights” Form
Employers are already tightly regulated
on obtaining an applicant*s or employee*s credit information. Companies may only seek consumer credit reporting agency disclosure on credit-worthiness, credit standing or credit capacity in connection with * specified job positions including managerial executives, * jobs involving regular access to financial records, and * positions for which credit background checks are required by law.
Whenever running such credit checks,
the employer or its agent must strictly comply with applicable federal and state laws, including the federal Fair Credit Reporting Act (FCRA).
the applicant or employee must receive a copy of the FCRA*s *Summary of Your Rights* form at various points in the credit check process, including when disclosing the intent to run the report, prior to taking adverse action based on the results of the report, and after taking adverse action upon the individual*s timely request.
This *Summary of Your Rights*
form describes the individual*s prerogatives to obtain and dispute information in consumer reports as well as how to obtain credit scores.
On September 12, 2018,
the Federal Bureau of Consumer Financial Protection (Bureau) issued an interim final rule updating the *Summary of Your Rights* form to comport with recent legislative changes to the FCRA which require all nationwide consumer reporting agencies to provide security freezes (locking down release of all credit information without express authorization) for no charge to consumers to deter identity thieves from fraudulently opening accounts in the consumer*s name.
The recent legislation also mandates that effective September 21, 2018,
individuals undergoing credit background checks must receive notice of the new security freeze right with receipt of the *Summary of Your Rights* form. For sake of convenience, the Bureau updated its *Summary of Your Rights* form to include the new notification language. The new form is located in Appendix K of the interim final rule.
Employers who conduct background checks
should ensure they or their background check companies comply with the interim final rule no later than the September 21, 2018 deadline.
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