As you may recall from our previous post, employers that run background checks are subject to a myriad of hyper-technical requirements under the Fair Credit Reporting Act (FCRA). Amazon is about to pay $5M due to background check violations...are you making the same mistakes?  [Click here for more].

One such obligation is to provide applicants and employees with a document called A Summary of Your Rights Under the Fair Credit Reporting Act  at specific times, including: (1) when sending a stand-alone Disclosure of intent to procure a consumer report for employment purposes, and (2) when sending a Pre-Adverse Action Notice if negative information within the background check report may result in denial of hire or termination of employment.  

 A new law that is effective on September 21, 2018 requires an additional Security Freeze disclosure "any time" the Summary of Rights is provided to applicants and employees. Therefore, on Wednesday the Bureau of Consumer Financial Protection issued a new version of A Summary of Your Rights Under the Fair Credit Reporting Act, which now includes the following disclosure:

Consumers Have the Right to Obtain a Security Freeze 

You have a right to place a ''security freeze'' on your credit report, which will prohibit a consumer reporting agency from releasing information in your credit report without your express authorization. The security freeze is designed to prevent credit, loans, and services from being approved in your name without your consent. However, you should be aware that using a security freeze to take control over who gets access to the personal and financial information in your credit report may delay, interfere with, or prohibit the timely approval of any subsequent request or application you make regarding a new loan, credit, mortgage, or any other account involving the extension of credit. As an alternative to a security freeze, you have the right to place an initial or extended fraud alert on your credit file at no cost. An initial fraud alert is a 1-year alert that is placed on a consumer's credit file. Upon seeing a fraud alert display on a consumer's credit file, a business is required to take steps to verify the consumer's identity before extending new credit. If you are a victim of identity theft, you are entitled to an extended fraud alert, which is a fraud alert lasting 7 years. A security freeze does not apply to a person or entity, or its affiliates, or collection agencies acting on behalf of the person or entity, with which you have an existing account that requests information in your credit report for the purposes of reviewing or collecting the account. Reviewing the account includes activities related to account maintenance, monitoring, credit line increases, and account upgrades and enhancements.

Are your company's background check forms and processes in compliance with applicable federal, state, and local laws?  Do you need a copy of the updated form?

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