Effective September 21, 2018, employers that use nationwide credit reporting agencies for background checks will be required to use a new “A Summary of Your Rights Under the Fair Credit Reporting Act” form (“the Summary”). The Summary stems from Congress’ May 2018 passing of the Economic Growth, Regulatory Relief, and Consumer Protection Act (“the Act”), which requires nationwide consumer reporting agencies to provide national “security freezes” for consumers, free of charge. The purpose of the “security freeze” is to prevent identity theft by limiting a prospective lender’s access to a consumer’s credit report. 

The Act also extends the minimum time that nationwide consumer reporting agencies are required to include an initial fraud alert (as an alternative to a security freeze and as a notice to prospective lenders that the consumer may have been the victim of identity theft) in a consumer’s credit file from 90 days to one year. Upon receiving notice of an initial fraud alert, a prospective lender is required to verify the consumer’s identity before extending new credit in the consumer’s name. 

How does this affect employers? As part of the required pre-adverse action disclosures made to an employee or job applicant (and any other time that the employer may choose to provide a copy of the Summary to employees), employers are required to provide the Summary, which includes the new notification regarding the “security freeze.” A copy of the Summary can be found here. A copy of the Summary in Spanish can be found here.