It's very important that we continue our mission to educate and inform our clients and readers about new regulations that may affect FCRA compliance. We regularly share information on this blog about screening for hiring or placing tenants while explaining the importance of applicant rights. The Fair Credit Reporting Act (FCRA) specifies how to collect consumer reports, who has access and for what purpose, and that applicants should be aware of the information in their consumer reports.
Effective this week, September 21, 2018, companies using background checks must implement new regulations pertaining to Consumer Rights and FCRA compliance.
What is the FCRA Summary of Rights?
The FCRA Summary of Rights is given to applicants as part of the adverse action process. When an applicant has the potential of being denied employment or housing due to the results of a background check, they should receive the following information:
- Contact information of the background reporting agency
- A copy of their report
- A notice that they can obtain a second report, free of charge, within 60 days
- A Summary of their Consumer Rights under the FCRA
These rights include who can access the consumer's information, that they must have "permissible purpose" for the access, that they should have asked the consumer for consent, that the consumer has a right to dispute the information contained in the report, and that the consumer can have outdated information deleted.
What's Changed in the Summary of Rights?
The Consumer Financial Protection Bureau (CFPB) and the Economic Growth, Regulatory Relief, and Consumer Protection Act (the Act) now require a new notice be added to the Summary of Rights as part of section 609 of the FCRA. The updated notice informs the consumer of their rights to obtain a Security Freeze at no cost. For many who've been affected by identity theft, this is a much welcomed change.
To comply with new regulations, changes have been made to the Summary of Rights document provided to consumers / applicants during the background check process. The 2012 document titled "Summary of Your Rights Under the FCRA" should be replaced with the new one.
What Should You Do Next?
If your company uses VeriFirst's Online Consent portal and denial notification services, we have you covered. The updated document has automatically been attached to your account. If your company obtains applicant consent to a background check or sends adverse decision letters on your own, you must replace your previous version of the "Summary of Your Rights Under the FCRA" document with the new one.
Of course you can always contact us if you have any questions or need assistance with FCRA compliance.
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