As of September 21, 2018, employers that use third-party background checks – regulated as “consumer reports” under the federal Fair Credit Reporting Act (FCRA) – must add new terms to the form entitled “A Summary of Your Rights Under the Fair Credit Reporting Act,” a disclosure that employers must provide prior to taking adverse actions against applicants or employees.

What’s New? 

Employers must use an updated “Summary of Your Rights” disclosure to comply with the FCRA. The terms added to the disclosure are designed to alert the job applicant or employee to his or her rights to place a so-called “security freeze” on his or her credit report from a nationwide consumer reporting agency. This security freeze will prohibit a consumer reporting agency from releasing information in the job applicant’s or employee’s frozen credit report without his or her express authorization.

How to Comply? 

The new version of the “Summary of Your Rights” document adopted by the Consumer Financial Protection Bureau (Bureau) is available here. Employers should use this form when notifying a job applicant or employee that the employer is considering taking an adverse employment action based on a background check provided by a third party. The new form contains the necessary information about obtaining a security freeze.


The FCRA imposes multiple notice and authorization requirements on employers who use third party entities to obtain background checks on employees for employment purposes. A detailed discussion of the FCRA and these employer obligations is available here.

One of these obligations is that, if an employer is contemplating an adverse employment action against a job applicant or employee based on a background check, the employer must provide the job applicant or employee with the federal “Summary of Your Rights” disclosure.

Section 301 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (the Act) amended the FCRA to include requirements relating to a consumer’s right to obtain a security freeze. Among other measures, the Act amends the FCRA to state that “[a]ny time a consumer is required to receive a summary of rights under section 609 [of the FCRA],” the notice must contain a prescribed disclosure relating to the right to obtain a security freeze.

Pursuant to the Act, the Bureau has revised the model forms that are included in the Bureau’s Regulation V (12 C.F.R. pt. 1022). The model forms now contain the necessary information relating to the right to obtain a security freeze.

Employers: Action Required

If they have not done so, employers should immediately replace the old version of the Summary of Your Rights document – which does not mention the security freeze – with the new version. Further, because the FCRA continues to be a hotbed for litigation, including class action litigation, and because state and municipal governments continue to pass laws regarding background checks (see, for example, here and here), employers should take this opportunity to review background check policies and procedures to ensure they are fully compliant with applicable legal requirements.