FCRA for the Client (Furnisher)

  • Step 1 – Consent
  • Before any consumer report is procured on an individual for employment purposes, you must notify the person in writing consisting solely of this notice and that you will use the report. Written consent is also required prior to obtaining a report. If the report will be used for employment purposes, the notice must indicate that is the case. There may be state laws specific to obtaining these types of reports and it would be worth researching to ensure you are compliant with not only federal laws but state laws too. A sample authorization form both is available below.
  • Sample Authorization Form

  • Step 2 – Prior to Taking Adverse Action
  • If you rely on the information provided on any type of consumer report to deny a job applicant, reassign or terminate an employee or even deny a promotion, you are required to give the individual a pre-adverse action disclosure document. The document must include a copy of of the individual’s consumer report and a copy of “A Summary of Your Rights Under the Fair Credit Reporting Act”. This important piece of legislation is prescribed by the Federal Trade Commission and the Consumer Financial Protection Bureau. The Consumer Reporting Agency that furnishes the individual’s report will give you the summary of consumer rights.
  • Summary of Consumer Reports
  • Preliminary Notice of Adverse Action

  • Step 3 – After Taking Adverse Action
  • After adverse action is taken, you must give the individual notice either orally, in writing, or electronically indicating you have taken the adverse action. The notice must include the following elements:
    • The name, address, and telephone number of the Consumer Reporting Agency that supplied the report
    • A statement that the Consumer Reporting Agency that supplied the report did not make the decision to take the adverse action and cannot give specific reasons for the action taken
    • A notice of the individual’s right to dispute the accuracy or completeness of any information the Consumer Reporting Agency furnished and the right to obtain an additional consumer report from the agency within 60 days
  • Post Notice of Adverse Action

  • Your Responsibility
  • As a Consumer Reporting Agency, you have a duty to follow the procedures mandated by the Fair Credit Reporting Act if a consumer report plays any part in your decision. You are required to provide the applicant with a Preliminary Notice of Adverse Action before you reject the application. When the applicant is formally rejected, you must provide a Post Notice of Adverse Action