Prepare to Update “Summary of Rights” in Light of Changes to the FCRA

September 13, 2018 by Verified First
Employers and Consumer Reporting Agencies should be aware that as of September 21, 2018, a major change to a commonly used Fair Credit Reporting Act (FCRA) form will go into effect.

Make sure you’re prepared to take action and comply!

What is changing?

In order to understand the change to the FCRA, it’s important to first understand the newly enacted Economic Growth, Regulatory Relief, and Consumer Protection Act (S. 2155). Introduced by Congress in May, this bill aims to offer consumers more oversight of their personal credit data. In the wake of data breaches and cyber attacks, control over personal data is more important than ever.

This bill has many provisions, but here are the key takeaways regarding background screening:

  • Consumers may request a Security Freeze or Fraud Alert, free of charge, from any of the nationwide Consumer Credit Reporting Agencies.
  • When a consumer is required to receive a copy of the Summary of Rights, it must include the new notification "Consumers Have the Right to Obtain a Security Freeze."
  • The length of time for initial fraud alerts is being extended from 90 days to one year.​

You can read more on S. 2155 here.

How do I stay compliant?

As a smart employer, you already know compliance is important. Failing to comply with changing regulations can result in costly (and preventable) class action lawsuits. That’s why our in-house compliance team is helping you stay up to date with the latest in compliance news.

Before the FCRA changes go into effect on September 21st, you will want to protect your company by updating your Summary of Rights. Verified First has made the updated Summary of Rights available for you on our website that includes the new language regarding security freezes. 

The new section about security freezes is as follows:

Consumers Have the Right To Obtain a Security Freeze
You have a right to place a ''security freeze'' on your credit report, which will prohibit a consumer reporting agency from releasing information in your credit report without your express authorization. The security freeze is designed to prevent credit, loans, and services from being approved in your name without your consent. However, you should be aware that using a security freeze to take control over who gets access to the personal and financial information in your credit report may delay, interfere with, or prohibit the timely approval of any subsequent request or application you make regarding a new loan, credit, mortgage, or any other account involving the extension of credit.

As an alternative to a security freeze, you have the right to place an initial or extended fraud alert on your credit file at no cost. An initial fraud alert is a 1-year alert that is placed on a consumer's credit file. Upon seeing a fraud alert display on a consumer's credit file, a business is required to take steps to verify the consumer's identity before extending new credit. If you are a victim of identity theft, you are entitled to an extended fraud alert, which is a fraud alert lasting 7 years.

A security freeze does not apply to a person or entity, or its affiliates, or collection agencies acting on behalf of the person or entity, with which you have an existing account that requests information in your credit report for the purposes of reviewing or collecting the account. Reviewing the account includes activities related to account maintenance, monitoring, credit line increases, and account upgrades and enhancements.

About Verified First
Verified First is known for delivering streamlined background screening backed by the best client support, and for developing the easiest, fastest HR system integrations, for free. Our client support team is U.S.-based, answers calls in seconds, resulting in hundreds of positive testimonials and a 96% customer satisfaction. Verified First's patent-pending, award-winning integrations include over 100 applicant tracking systems, and provide clients a turn-key experience.

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