The Fair Credit Reporting Act (FCRA) standardizes employers who utilize third party background checks (also known as a Consumer Reporting Agency or CRA). Employees or applicants must be given certain information before a company can obtain a background check from a CRA, including the scope of the check being performed. Written consent must be obtained from the employee or applicant for the background screen to be performed and must be a stand-alone document.
With the new calendar year of 2013, the FCRAs (Fair Credit Reporting Acts) Summary of Rights form will go through some changes. According to Kauff McGuire and Margolis:
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, rule-making authority for the relevant portions of FCRA was transferred to the Consumer Financial Protection Bureau (CFPB), as of July 21, 2011. The CFPB subsequently re-issued the FTC’s notice “A Summary of Your Rights Under the Fair Credit Reporting Act” to reflect the transfer of authority to the CFPB and other administrative changes. On or prior to January 1, 2013, employers must use the CFPB’s new notice (or a form substantially similar to the notice), in lieu of the notice from the FTC that they are currently providing to applicants and employees to comply with FCRA.
Employers should review their current background check materials and, on or before January 1, 2013, replace current copies of “A Summary of Your Rights Under the Fair Credit Reporting Act” with the updated version of the notice published by the CFPB.
Sources: www.themodernworkplace.com; Kauff McGuire and Margolis L.L.P.; Snell and Wilmer L.L.P.; U.S. Government Printing Office