Consumer Financial Protection Bureau (CFPB) Issues Revised Notice

September 18, 2018


By Ryan Orr, JD, Human Resource and Compliance Consultant
Cascade Employers Association
[email protected]

On September 12, 2018, the CFPB issued a revised summary of rights notice that must be given when obtaining a consumer report on an individual. The new notice contains information about how to place a security freeze on your credit, which was added in response to legislation addressing the 2017 Equifax breach. Employers are required to use this notice beginning September 21, 2018 (yeah, that’s right, CFPB didn’t give us a lot of time on this one).

As an employer, why do I care about this? Well, the definition of consumer report is broad and includes things like criminal background checks or other pre-employment inquiries if obtained by a third-party who compiles reports on individuals. So when an employer uses a third-party to conduct a background check, the employer is obligated to provide the candidate with a notice of the individual’s rights under the Fair Credit Reporting Act (FCRA).

While some background companies take care of the notices on behalf of their employer clients, it is the employer’s obligation to make sure that the notice is provided. Therefore, it is incumbent on an employer to either confirm that the background checking company is taking care of the notices, or the employer must provide the notice itself.

One last reminder: in addition to the summary of rights notice, employers should be getting an authorization to perform a background check that meets the requirements of FCRA, as well as providing an adverse action letter to candidates who are not hired based on information found in the background check.

If you have questions about background checks or your legal obligations when performing them, give us a call.

 

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