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Legal Alert: Employers Must Use Revised FCRA Forms Beginning January 1, 2013

Athens, GA (Nov. 1, 2012) - Steven C. Millwee, CPP (President and CEO, SecurTest, Inc.)

Executive Summary:  Beginning January 1, 2013, employers must use the revised forms issued by the Consumer Financial Protection Bureau (CFPB) in November to conduct background checks under the Fair Credit Reporting Act (FCRA).   
The FCRA imposes requirements on employers and users of background reports, often called consumer reports and investigative consumer reports on employees and applicants. 
A consumer report includes a written or oral summary of a person's credit-worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living. An investigative consumer report is a consumer report containing information about a person's character, general reputation, personal characteristics, or mode of living that was obtained through personal interviews with neighbors, friends, associates, or others who have knowledge of such information about the consumer. Importantly, criminal records or criminal conviction records are included in the definitions used under the FCRA.
Previously, the Federal Trade Commission (FTC) was solely responsible for interpreting and enforcing the FCRA.  In July 2011 the responsibility for interpreting the FCRA was transferred to the Consumer Financial Protection Bureau (CFPB.) The FTC began to share responsibility for enforcement with the CFPB.  In November 2012 the CFPB issued revised forms that employers are to use when complying with the FCRA's background check requirements.  The revisions to the forms include instructing employees to contact the CFPB or visit its web site to learn more about their rights under the FCRA instead of contacting the FTC.  The new forms do not impose additional substantive requirements on employers. 
SecurTest sends to its clients updated Consumer Authorization Forms. You can also find the revised forms by clicking on the links provided.  SecurTest clients should use the SecurTest form or include the iReviewNow section in a separate form to ensure compliance with the benefits of our patented solution.
The forms that the CFPB has revised are:

  1. A Summary of Your Rights Under the Fair Credit Reporting Act (Revised Appendix K to Part 1022).  CRAs provide this to employers.  Employers must provide this form to an employee prior to taking an adverse employment action based on a consumer report.  You can access a copy of this form by clicking here.
  2. Notice to Furnishers of Information: Obligations of Furnishers Under the FCRA (Revised Appendix M to Part 1022 – Notice of Furnisher Responsibilities).  You can access a copy of this form by clicking here.
  3. Notice to Users of Consumer Reports: Obligations of Users Under the FCRA (Revised Appendix N to Part 1022 – Notice of User Responsibilities).  You can access a copy of this form by clicking here.

These forms are also available at: https://www.federalregister.gov/articles/2012/11/14/2012-27581/fair-credit-reporting-regulation-v-correction#h-14.
The Final Word:
Employers should be prepared to use the new forms beginning on January 1, 2013.  If you have any questions regarding this Alert or other FCRA requirements, please contact your legal counsel or call SecurTest at (800) 445-8001. Clients should contact SecurTest at compliance@securtest.com to ensure the latest SecurTest / iReviewNow Authorization form is being used.

Frequently Asked Questions

Q. Do we have to use the language required by the FCRA / CFPB, as we do not check credit? 

A. Yes, the mandates are very specific.

Q. Why must we use words, such as credit-worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living when we are only checking criminal convictions? 

A. The FCRA has used this language for decades and requires it to be used in the authorization.

About SecurTest and iReviewNow. SecurTest was recently named one of the top background screening companies by HRO Today and is the fastest-growing company of its kind, with growth of 300 percent in 2011. Having acquired new government and private sector contracts, SecurTest’s revenues are expected to quadruple in 2012. The company’s growth has been fuelled by the 2011 introduction of its patented iReviewNow® System, which allows consumers the opportunity to review their background reports in real-time, and dispute any inaccuracies before adverse hiring actions or business decisions are made. SecurTest is relied upon by various branches of the U.S. government to perform background investigations, including the military and the Department of Homeland Security. SecurTest ensures that reports are accurate using its proprietary iReviewNow System. Call (800) 445-8001 for more information or go to www.ireviewnow.com or www.securtest.com.
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