Update Your Company’s Fair Credit Reporting Act Summary of Consumer Rights Form Prior to January 1, 2013

The government is changing your hiring process.  The federal Fair Credit Reporting Act (“FCRA”) requires that employees and job applicants provide written consent before an employer can use a third party credit reporting agency to obtain a credit report, including a criminal background check.  In addition, before an employer can take an adverse employment action against an individual on the basis of information learned through a credit report, it must provide him/her with a copy of the FCRA’s Summary of Consumer Rights form.

When the new Consumer Financial Protection Bureau recently took over enforcement of the FCRA from the Federal Trade Commission, it revised several key forms to reflect this change, including the required Summary of Consumer Rights form.  Use of the new Summary of Consumer Rights form, available here, is mandatory beginning January 1, 2013.

Bottom Line for Employers:

Employers need to update their Summary of Consumer Rights form by January 1, 2013 to be in compliance with the FCRA.  Please note that some states have additional credit and background check procedures, which should also be reviewed periodically for compliance.

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