In the latest Weekly Wright Report:

• WWR ALERT! Employer FCRA Notice Changing –read now

WWR ALERT! Employer FCRA Notice Changing

A change was made effective in May which was unknown to many employers.  In May 2018, Congress passed the Economic Growth, Regulatory Relief, and Consumer Protection Act, which requires nationwide consumer reporting agencies to provide a “national security freeze” free of charge to consumers. This freeze restricts prospective lenders from obtaining access to an individual’s background report, which presumably also makes it more difficult to steal an individual’s personal information.  The Act also states that whenever the Fair Credit Report Act (FCRA) requires a “consumer” to receive a summary of his/her consumer rights, it must also include notice regarding the availability of a security freeze.

Not only does this implicate lenders and others who make credit decisions, it also impacts employers who choose to do background checks on applicants and employees.  FCRA obligations exist whenever a current or prospective employer requests a “consumer report.” Such a report includes credit searches, driving records, and even criminal records.  All employers must inform applicants and employees of the intent to request such a report and must obtain express written authorization from the employee or applicant before doing so.  If the employer subsequently takes adverse action or refuses to hire the applicant based on information in the report obtained, the employer is also required to provide the individual with a copy of the report as well as a copy of the Summary of Consumer Rights. The employer is then supposed to wait a “reasonable period of time” before acting on the report.

Because of the changes to the FCRA, employers must now use the new form notice, found here, which includes information on the availability of a security freeze.

Want more? Visit the Weekly Wright Report page to browse past issues.