eTrends - By January 1, 2013, FCRA Forms Must be Updated


By January 1, 2013, employers and consumer reporting agencies must use revised, updated forms for certain notices required by the Fair Credit Reporting Act (FCRA). The revisions indicate that the recently created Consumer Financial Protection Board, rather than the Federal Trade Commission, now has responsibility for interpreting the FCRA and that requests for information about individual rights under the FCRA should be directed to the Consumer Financial Protection Board rather than the Federal Trade Commission. The Consumer Financial Protection Board was created following the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act, effective July 2011.

The revised forms, A Summary of Your Rights Under the Fair Credit Reporting Act, Notice to Furnishers of Information: Obligations of Furnishers Under the FCRA, and Notice to Users of Consumer Reports: Obligations of Users Under the FCRA, are available online - (Appendices K, M and N to 12 CFR Part 1022). The Summary of Rights under the FCRA form is the form that employers must provide to applicants and employees when the individual will be subject to an investigative consumer report and when a pre-adverse action notice is sent to the applicant or employee.

When an employer uses consumer reporting agencies to conduct background checks for employment purposes, the employer must comply with the procedural requirements of the FCRA. Those requirements include obtaining the applicant's or employee's written authorization before performing a background check and notifying the applicant or employee prior to taking adverse action based on information obtained through the consumer report. After an employer takes adverse action based in whole or in part on information obtained from the report, the employer must give the individual a notice with information about the third party agency that provided the background information and notify the individual that he has a right to obtain a copy of the report.

By January 1, 2013, employers should ensure that they are using the appropriate, updated forms of the notices required under the FCRA and should also ensure that they are, in general, in compliance with the requirements of the FCRA.

Please contact Susan Parrott with any questions.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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