As we prepare to ring in the New Year, employers should be aware that their obligations under the Fair Credit Reporting Act (“FCRA”), federal legislation regulating the collection, dissemination, and use of consumer information from consumer reporting agencies, including certain employee background checks, will change effective January 1, 2013. Notably, the Consumer Financial Protection Bureau (“CFPB”), which began administering the FCRA earlier this year, will require that employers and credit reporting agencies use the revised versions of three (3) of the forms distributed during the background check process covered by the FCRA (these forms can be found at Appendices K, M and N to 12 C.F.R. part 1022). While two of these forms (“Notice to Users of Consumer Reports: Obligations of Users Under the FCRA” and “Notice to Furnishers of Information: Obligations of Furnishers”) are distributed by credit reporting agencies, the third form “A Summary of Your Rights Under the FCRA”, must be provided by employers both to employee applicants and existing employees when conducting investigative consumer reports or sending pre-adverse action notices.
The substantive content of the revised forms is virtually the same as the content of the pre-January 1, 2013 forms, but they have been updated to reflect that the CFPB rather than the Federal Trade Commission will now administer the FCRA and to include the contact information for the CFPB. While it may seem minor, an employer’s failure to use the new forms with the updated responsible agency and contact information could result in misdelivery or misfiling of complaints and concerns which in turn may expose the employer to statutory, actual and punitive damages as well as attorneys’ fees. Given the current emphasis by both agencies and the plaintiff’s bar to ensure FCRA compliance, employers should take the time now to review and update existing FCRA documents in order to be ready for the January 1, 2013 distribution date.