The Consumer Financial Protection Bureau (CFPB) issued a new Summary of Rights notice under the Fair Credit Reporting Act (FCRA). The FCRA promotes the accuracy, fairness, and privacy of information in the files of consumer reporting agencies.
Companies using outside businesses to conduct background checks are required to ensure all candidates receive the new notice beginning Wednesday, April 19th. Minor changes to the notice include, new contact information for the CFPB and some federal agencies and the removal of obsolete businesses, one being Federal Land Bank. There are no substantial legal changes.
Companies must use a valid compliant consent form for background checks and comply with additional conditions of the federal FCRA, such as offering both a “pre-adverse action notice” and a “post-adverse action notice” to candidates they decide not to employ based partly or completely on the data obtained from a background check performed outside of the company.
As always, the FCRA is a stringent (liability) law. It is not permissible for a company to say it was unaware the law was broken as an excuse. Also, appointing compliance accountability to an outside agency performing background checks is unacceptable. Companies can however require outside (background check) agencies to compensate them for damages associated with any violations if this agreement is in writing.