What Does Notice to Users of Consumer Reports Mean?
A Notice to Users of Consumer Reports is a disclosure document required by Section 1681e(d) of U.S. Fair Credit Reporting Act (FCRA). Pursuant to this law, credit reporting agencies (CRAs) or services gather and report background information about individuals to provide to the entities to whom the report will be delivered.
The notice is a disclosure to employers regarding their duties and obligations under federal law as it relates to the use of the background information they have been provided by the screening agency.
Among the disclosures required in this notice are statements notifying users that they must have a permissible purpose for requesting the report and must provide certification of that permissible purpose. Users of the report must also be informed of their obligation to notify an individual if they intend to take adverse action as a result of information discovered in the report. The entire Notice to Users of Consumer Reports details several other statutory obligations and the liabilities that may result from a failure to comply with the FCRA.
WorkplaceTesting Explains Notice to Users of Consumer Reports
The term Notice to Users of Consumer Reports is derived from the terminology used in FCRA.
The FCRA defines a consumer report as information communicated by a consumer reporting agency regarding an individual's credit, character, reputation, personal characteristics or mode of living if the information is to be used to determine that individual's eligibility for credit or insurance, employment or other purposes enumerated in the act. Criminal records, income histories, and other information typically included in a background check are all consumer reports under the FCRA.
Employers, insurers or other entities requesting this information for the statutorily defined purposes are the users of consumer reports to which the notice must be provided. Any person or entity that assembles or evaluates consumer credit or other information for the purposes of providing a consumer report to another party is a consumer reporting agency.
The primary purpose of the FCRA is to protect the rights and privacy of individual consumers. As such, both consumer reporting agencies and users have specific duties and obligations that must be carefully observed under the FCRA.