Start the new year out right by using the updated “Summary of Consumer Rights” form, required as of January 1, 2013, to comply with the Fair Credit Reporting Act (“FCRA”). Even if you updated your form earlier in 2012, you should note that the Consumer Financial Protection Bureau (“CFPB”) re-revised the form in November 2012.
Under the FCRA, employers who obtain and use consumer reports, including background checks, from consumer reporting agencies (third parties) have specific duties:
The CFPB revised the “Summary of Consumer Rights” to be provided by employers to applicants/employees prior to taking an adverse action. The revised form, which must be used after January 1, 2013, advises consumers that they can contact the CFPB or visit the website at http://www.consumerfinance.gov/learnmore to obtain more information about their rights. The CFPB issued corrected model forms in November 2012. Visit http://www.thompsoncoburn.com/images/newsletters/2013-Revised-Summary-of-Your-Rights-11-29-12.pdf for the corrected “Summary of Consumer Rights” form.
It is important for employers to update their background check processes to include the revised "summary of rights," as employers that "negligently" or "willfully" fail to comply with any of the FCRA's requirements face potential lawsuits by applicants or employees. Negligent failure to comply can result in actual damages and attorneys' fees. Statutory damages ($100-$1,000 per violation), attorneys' fees and punitive damages are available for willful non-compliance.
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