CSI is issuing the following client alert:
In light of recent litigation in the area of consumer disclosure under the Fair Credit Reporting Act (FCRA), CSI has updated our Sample Disclosure and Acknowledgment form to move consumer state rights notices and disclosures to a separate Sample State Notices form.
Changes to Electronic Disclosures
For clients using electronic disclosures through our Applicant Management Center (AMC), consumers will see a minor change in the manner in which the information appears. As an alternative to one continuous page in which the consumer scrolls down into separate page sections, the disclosure will appear as its own page for the consumer to acknowledge.
Changes to Paper Forms
The previous Sample Disclosure and Acknowledgement paper form was two pages, which included state notices starting on the first page of the Disclosure. The new Sample Disclosure and Acknowledgement Form is now a single page document. The State Notice form is now a single page document. In effect, the number of pages for the disclosure and state notices remains the same.
Why Are These Changes Being Made?
Section 604(b)(2) of the FCRA governs the requirement for disclosure to consumer as outlined below.
(a) In general. Subject to subsection (c), any consumer reporting agency may furnish a consumer report under the following circumstances and no other:
(2) Disclosure to Consumer.
(A) In general. Except as provided in subparagraph (B), a person may not procure a consumer report, or cause a consumer report to be procured, for employment purposes with respect to any consumer, unless -
(i) a clear and conspicuous disclosure has been made in writing to the consumer at any time before the report is procured or caused to be procured, in a document that consists solely of the disclosure, that a consumer report may be obtained for employment purposes; and
(ii) the consumer has authorized in writing (which authorization may be made on the document referred to in clause (i)) the procurement of the report by that person. [15 U.S.C. § 1681b]
Several class action suits have been filed against employers who included extraneous information in their FCRA disclosure forms. Court opinions vary but some appear to take a narrow view that including liability waivers and/or other extraneous language could be a violation of the FCRA requirement to have a disclosure that consists "solely of the disclosure".
A sample Disclosure and Acknowledgement, as well as a sample State Notices document, are posted on our website at http://www.creativeservices.com/resource-center/consumer-forms. We encourage you to review your current disclosure forms with your counsel for any extraneous language that may be included.