Employers who use consumer reports to make employment decisions must comply with the Fair Credit Reporting Act (FCRA). Under the FCRA, an employer taking adverse action based on information in a consumer report, such as a credit report or background check, must provide the affected employee or applicant with a copy of the relevant report and a Summary of Consumer Rights.
The Consumer Financial Protection Bureau (“Bureau”) recently updated its model Summary of Consumer Rights to comply with new legislation. Specifically, the Economic Growth, Regulatory Relief, and Consumer Protection Act, which passed in May 2018, requires consumer reporting agencies to provide free credit freezes to consumers.
These credit freezes, known as “national security freezes,” are intended to prevent identity theft by restricting access to a consumer’s report. As of late September 2018, employers must now include notice of the available freeze in the Summary of Consumer Rights.
An updated Summary of Consumer Rights is available on the Bureau’s website. Employers should incorporate the revised form immediately.