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| Credit and Financial Checks
August 30 2018

FCRA Amendment To Affect Pre-Adverse Notice Action Requirements

Amendments to FCRA require background check vendors to react when a consumer has been or is about to become a victim of fraud or identity theft.  The chnge  adds a new subsection to Section 1681c-1 that addresses consumers’ right to obtain a “security freeze” under certain circumstances. 

A “security freeze” is a restriction that prohibits a CRA from disclosing the contents of a consumer report to someone requesting the report.  The law provides for a new notice entitled “Consumers Have The Right To Obtain A Security Freeze” (“Security Freeze Notice”) to be provided in certain circumstances.  Even if a security freeze is effective, though, the Act provides that the freeze does “not apply to the making of a consumer report for use of . . . [a]ny person using the information for employment, tenant, or background screening purposes.”  Thus, at a high level, it appears that the Act’s FCRA amendments should not impact employers.