IMPORTANT: Updated Pre-Adverse Action Notice for Applicants and Employees!


All Employers


September 21, 2018


Contact HR On-Call

(888) 378-2456

The federal Consumer Financial Protection Bureau (CFPB) recently issued an updated version of “A Summary of Your Rights Under the Fair Credit Reporting Act” (Summary) that includes a new notice to consumers about their right to implement a free “security freeze” under certain circumstances, preventing consumer reporting agencies from disclosing the contents of a consumer report. Although the Summary has been updated with this new notice, “security freezes” do not apply to any person “using the information for employment … or background screening purposes.”

Nonetheless, “consumers” must receive the security freeze notice any time the Summary is required under 15 U.S.C. § 1681g, which requirements are directed to consumer reporting agencies. Additionally, under 15 U.S.C. § 1681b of the Fair Credit Reporting Act (FCRA), employers must provide the Summary before taking any adverse action based on the background check results. There is some reported confusion about whether employers must also include the security freeze notice when they provide the Summary, because the requirement is not specifically stated as to employers. However, until Congress or the courts provide clarification, employers should use the most up-to-date version of the Summary, including the security freeze notice, as a best practice to avoid any potential claims of failed notice.

Action Items

  1. Use the updated version of “A Summary of Your Rights Under the Fair Credit Reporting Act” when sending pre-adverse action letters to applicants or employees. English and Spanish versions are available here.
  2. Verify that your background check vendor is using the most current version of the Summary.
  3. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2018 ManagEase

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