FCRA and ICRAA Compliance

The Ninth Circuit Court of Appeals recently ruled that disclosure forms utilized by employers may violate the FCRA and ICRAA by including extraneous state law notices and potentially confusing language in their background disclosure forms. Both the FCRA and ICRAA regulate background screening and the process that employers must follow when procuring background reports on applicants. Under both of these statutes, before obtaining a consumer report, the employer or other users of consumer reports must provide the applicant with a document that clearly states that a consumer report will be obtained (clear and conspicuous disclosure) and also require that this disclosure must be in a document that consists solely of the disclosure. Staying compliant.

The ruling by the Ninth Circuit held that this statutory language prohibits employers from including ANY unnecessary language in the disclosure document. This means that employers cannot include disclosures required by other state laws in the same document that contains the disclosure, as any additional language that could confuse a reasonable person about his or her rights under the FCRA or ICRAA could be construed as violating the “clear and conspicuous” requirement on the disclosure.

What this ruling does is serve as a reminder that employers must be careful about reviewing their background check disclosure and authorization forms as well as the processes used for their background checks. These forms should be standalone documents so that the purpose of the documents are clear to a “reasonable person.”

PeopleG2 has reviewed it’s release forms with it’s legal team to ensure compliance, and will be providing these forms to all of it’s clients. Be sure you have the most up to date forms before running a Consumer Report. Please contact our Customer Service Team with any questions.