Beginning January 1, 2013, employers must use the new Fair Credit Reporting Act (“FCRA”) disclosure forms developed by the Consumer Financial Protection Bureau, which has now become the lead regulatory body for compliance with the federal FCRA.

When an employer conducts a background check on a prospective employee, or even for promotion or retention purposes, it must comply with the FCRA.  The basic requirements are that before a “consumer report” can be obtained (which can be as simple as a request for a criminal record search, to as complex as interviewing co-workers, neighbors, coupled with civil litigation searches and credit history analaysis), the employer must obtain their written permission.  The notice must be in writing and separate from the employment application.  If however, the consumer report is being obtained as part of an internal investigation, the FCRA does not require prior consent, but does require compliance with other provisions as discussed below.

If the consumer report surfaces derogatory information, prior to taking any adverse action based upon information in the consumer report, if it has not done so already (as in the case of an internal investigation) the employer must give the employee a copy of the Summary of Your Rights Under the Fair Credit Reporting Act, the name, address and phone number of the company that supplied the report as well as a statement that the company that supplied the report did not make the adverse decision and cannot give specific reasons for it.  These procedural items provide the subject with the ability to examine and, if appropriate, challenge the report.

In our experience, we  found many errors in the public record, including erroneous entries at the criminal and civil court levels, the credit bureaus, and even the social security administration.  Without conducting an analysis of the information and comparing it to other objective pieces of evidence, such data entry errors can impugne the character of an otherwise law-abiding job prospect.  The opportunity to challenge such results, especially if the consumer report is nothing more than a “data dump,” can mean the difference between getting a job, and perennially being turned down for one because of an erroneous record entry.

The revised forms are available for download here:

FCRA Consumer Notice 2013 (Summary-of-Your-Rights)

FCRA User Notice 2013

November 1, 2012

Earlier this month, Jeff Brenner, Esq., NJLPI, provided tips to the residents at Lionsgate, Voorhees, NJ on how to protect themselves from becoming a victim of fraud.  Recommendations included: limiting the amount of personal information provided to healthcare providers and asking how such data will be stored, signing up for credit monitoring services, shredding documents with personally identifiable information, conversing with a trusted friend before donating money to “worthy” cause, and always logging into your bank’s or credit card company’s home page on the web rather than clicking through an email link requesting personal information.  During the event, the audience eagerly shared its stories of how difficult it was at times to get a live person on the telephone in order to confirm their credit report, and the volume of phone calls from charitable organizations seeking donations.   The event was sponsored by the Jewish Community Foundation, Inc.