Employers that use background reports from third-party credit reporting agencies or investigative agencies must issue employees and applicants a written statement of their rights. A new disclosure form has just been issued by the federal government and employers should discard their “old” forms and immediately begin to use the new form.
The Fair Credit Reporting Act requires very specific procedures for employers who wish to use credit reporting agencies or other third-party investigators with respect to checking on job applicants or even investigating employees for potential job promotions. Employers are required to follow a very specific set of procedures and to use very specific forms. For example, the authorization to use a third-party investigative or reporting agency must be given by the employee on a form that is separate and apart from the normal job application. In other words, that authorization can’t just be added to the long paragraph containing statements of rights and procedures which is a part of nearly every job application used in the United States. Additionally, those same employers must issue to applicants and employees a document entitled “A Summary of Your Rights Under the Fair Credit Reporting Act.” The Fair Credit Reporting Act previously was administered by the Federal Trade Commission. However, responsibility for that Act and a number of other consumer and finance related laws has been transferred to the Consumer Financial Protection Bureau (“CFPB”), which has been in existence only since July of 2011. The CFPB modified the document described above, issued it, and its use is required after January 1, 2013. Previous forms which reference the Federal Trade Commission at the end of the first paragraph should be discarded.
We would be happy to provide a copy of this form to anyone upon request.