The Consumer Financial Protection Bureau (CFPB) released an updated version of "Summary of Your Rights Under the Fair Credit Reporting Act" that employers must use before conducting background checks. Updates were made to both the English and Spanish versions and employers have until March 20, 2024 to use the new notice. A copy of the notice may be accessed by clicking here.
When applying for a job, many employers will conduct background checks as part of their hiring process. These checks can include a review of a candidate’s criminal history, employment history, education, and credit history. While background checks can help employers make informed hiring decisions, employers must follow certain rules under the Fair Credit Reporting Act (FCRA), as outlined in the Consumer Financial Protection Bureau’s (CFPB) Summary of Your Rights Under the Fair Credit Reporting Act to ensure that job candidates are treated fairly and that their privacy is protected.
The Fair Credit Reporting Act (FCRA)
The FCRA is a federal law that regulates the collection, use, and disclosure of consumer credit information. The law applies to background checks conducted by employers, as well as other types of consumer reports.
Under the FCRA, employers must obtain written consent from job candidates before conducting a background check, and they must provide a clear and conspicuous disclosure that a background check will be conducted. Employers must also comply with certain notice and disclosure requirements if they intend to take adverse action based on the results of the background check.
The CFPB Summary of Your Rights Under the Fair Credit Reporting Act
The CFPB Summary of Your Rights Under the Fair Credit Reporting Act is a document that outlines the key rights that job candidates have when it comes to background checks.
One of the most important rights that job candidates have is the right to privacy. Employers must obtain the candidate’s written consent before conducting a background check, and they must provide the candidate with a clear and conspicuous disclosure that a background check will be conducted. The candidate also has the right to know what information will be included in the background check, and the right to dispute any inaccuracies in the report.
Job candidates also have the right to fairness and accuracy in the background check process. Employers must take steps to ensure that the information obtained in a background check is accurate and up-to-date. This includes verifying the information with the original source and providing the candidate with an opportunity to dispute any inaccuracies. Employers must also comply with federal and state laws that prohibit discrimination based on factors such as race, gender, age, and disability.
The CFPB Summary of Your Rights Under the Fair Credit Reporting Act must be provided to job applicants before an employer conducts a background check or takes an adverse employment action in response to a background check. Employers should use the updated version of the CFPB Summary of Your Rights Under the Fair Credit Reporting Act notice and familiarize themselves with the FCRA to ensure that they are complying with applicable laws and regulations.
