Background Screening Compliance 101: FCRA Summary of Rights

The background screening process is built with the candidates in mind. That includes the built-in and mandatory compliance steps that employers that use background reports and background screeners must follow.

Federal and some state and local laws look to empower candidates with notices of rights and provide next steps once a background report has been done on them. The candidate may not know where to go if they wish to dispute information, for example. That’s part of why certain documents, such as the “Fair Credit Reporting Act (FCRA) Summary of Rights” exist.

The FCRA Summary of Rights is important because it outlines the consumer’s rights under the FCRA. Some states even have a state-specific summary of rights, like Washington.

Transparent Protections for Candidates

The FCRA regulates the background screening industry, and includes many requirements for background screeners (known as “consumer reporting agencies” under the FCRA) and employers that use background reports (called “consumer reports” under the FCRA).

Say a background report contains a record, and a potential employer is considering taking adverse action against a candidate based on the background report – what then? Let’s look to what the FCRA says if a background report is used for employment purposes. When a potential employer is considering taking adverse action against a candidate based, in whole or in part, on information contained in the background report, before taking adverse action, they must provide the candidate with:

1. A copy of the report; and
2. A written description of their rights under the FCRA (the “FCRA Summary of Rights”)

Since employers make the hiring decisions, it may be up to you to provide these to candidates.

Need help managing these documents? Ask us about our Candidate Communication Tool. This Built-in solution helps manage your compliance documents for adverse action and more ››

What May Be Included in a Summary of Rights

Federal law defines what must be included in the FCRA Summary of Rights. This includes, but may not be limited to, a description of:

1. Rights of the consumer to:

• Obtain a copy of a consumer report from each consumer reporting agency pursuant to federal law. This includes the frequency and circumstances under which a consumer is entitled to receive a consumer report without charge pursuant to federal law.
• Dispute information in the file of the consumer under the FCRA.
• Obtain a credit score from a consumer reporting agency and a description of how to obtain a credit score.

2. Method for consumers to contact, and obtain, a consumer report from:

• A consumer reporting agency without charge, as provided in federal regulations prescribed under the Fair and Accurate Credit Transactions Act of 2003.
• A Nationwide Specialty Consumer Reporting Agency, as that term is defined by the FCRA, as provided in federal regulations prescribed under the FCRA.

Helpful Resources for the FCRA

Users of consumer reports are not alone in drafting an FCRA of Summary of Rights. The Bureau of Consumer Financial Protection (CFPB) is required to “prepare a model summary of the rights of consumers under the [FCRA].”

The CFPB is required to:

• Actively publicize the availability of the model summary of rights
• Conspicuously post on its Internet website the availability of such summary of rights
• Promptly make such summary of rights available to consumers, on request

The model FCRA Summary of Rights mandated by the CFPB was last amended on September 21, 2018.

Compliance Resources:

• A copy of the model FCRA Summary of Rights is available here
• Additional information from the CFPB is available here

Have other questions about the documents needed for a compliant background screening process? Our client Resource Library is a great place to help you start thinking critically about your documents with sample disclosures to help you as you draft or review your own. Your legal counsel can also be a go-to resource to help you ensure you remain in compliance with federal and state background screening laws. Use those resources to create a compliance program that helps you stay on top of background screening requirements.

Do you have all your FCRA basics in order? Use our checklist to see ››