Consumer Reports & Investigative Consumer Reports: Separate Disclosures?

We’ve previously talked about one keystone obligation of employers under the Fair Credit Reporting Act (FCRA), background check disclosures and authorizations.

Before requesting a background check on an applicant, the employer has to share specific documents with the employee or applicant.

      • Those include a clear and conspicuous written disclosure, in a document consisting solely of the disclosure, that the employer may obtain a Consumer Report (aka background check) on the applicant or employee for employment purposes.
      • The employer must get written consent from the applicant or employee to receive such a report too.

      But did you know there different kinds of disclosures for different types of background checks? If not, let’s get you caught up on what you’ve been missing.

      There are additional disclosure requirements under the FCRA for Investigative Consumer Reports, which are specific types of Consumer Reports. The FCRA says that an Investigative Consumer Report includes information on the employee or applicant obtained through personal interviews with their neighbors, friends, or associates – including previous employers.

      An employer cannot get an Investigative Consumer Report on an employee or applicant unless it also:

          • Clearly and accurately discloses to the employee or applicant in writing that it may obtain an Investigative Consumer Report, including information from the referenced personal interviews as to their character, general reputation, personal characteristics, and mode of living;
          • Provides the disclosure to the employee or applicant within three days of requesting the report; and
          • Includes a statement in the disclosure informing the employee or applicant of their right to request additional disclosures and a written summary of rights, as provided by the FCRA.

      An employer who wants to obtain an Investigative Consumer Report on an applicant or employee must provide them with both the Consumer Report and Investigative Consumer Report disclosures. Some employers have decided to combine both of these disclosures into one document to cover all the bases. That is not a good idea, according to a recent case decided in the District of Idaho (Mitchell v. Winco Foods, LLC).

      Remember that a Consumer Report disclosure must be in a document consisting solely of the disclosure? In the Mitchell v. Winco Foods, LLC case, the court found that adding Investigative Consumer Report disclosure information in a Consumer Report disclosure violates the FCRA’s Consumer Report standalone disclosure requirement. The court indicated that any employer who intends to obtain an Investigative Consumer Report on an employee or applicant for employment purposes should provide them with two disclosures – a Consumer Report Disclosure and an Investigative Consumer Report Disclosure.

      This is just one case. Still, if you are including reference checks and employment history verifications in your background checks for employees and applicants, you may consider keeping two separate disclosures just that, separate.

      Not sure where to start? Verified Credentials makes sample disclosures for both Consumer Reports and Investigative Consumer Reports available in our Resource Library. Log in to download the sample to discuss your disclosure requirements and plan with your legal counsel.

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