With background screening litigation against employers continuing to rise, many organizations find themselves asking the same question: Are we fully compliant with the Fair Credit Reporting Act (FCRA)? You may be doing all the right things to protect your organization by ordering background checks on your applicants, but you could be violating FCRA law and state laws without knowing it. A common misconception is that the background screening provider bears the responsibility for compliance — but in reality, the employer is legally accountable.
Unfortunately, many screening firms aren’t keeping up with FCRA requirements on forms that must be provided to applicants before running a background check. Since it’s not their legal obligation to do so, many firms may offer sample forms without verifying accuracy, leaving employers exposed to risk. Forms are one of the top two areas of litigation against employers, so getting them right is essential.
Let’s talk today about the required FCRA Applicant Consent process and how to protect your organization.
Applicant Authorization Forms and FCRA Requirements
FCRA Violation (15 USC 1681)
Before you run a background check on any applicant, the Fair Credit Reporting Act (FCRA) requires that you first provide them with a clear and standalone disclosure stating that a consumer report may be obtained for employment purposes. While this seems simple, missteps are common and costly. A Disclosure is not an Authorization & Acknowledgement Form, or combination of forms and this is where a lot of confusion can occur that can create a violation.
What is a standalone disclosure?
A standalone disclosure is just what it sounds like, a single document with one purpose: to tell the applicant that you’re running a background check for employment purposes. Nothing more, nothing less.
The disclosure must be “clear and conspicuous” and cannot include any extra language that distracts from its purpose. This is where many employers — and even some screening firms — go wrong.
Required FCRA Forms Before Running a Background Check
Before running a background check, employers must provide applicants with several required documents. These forms not only ensure transparency but also protect your organization from costly FCRA violations.
Here’s what needs to be given — and who keeps each document.
FCRA Disclosure Regarding Background Check
This brief document must be solely on a page by itself and simply discloses to the applicant that a background check will be run on them, what it may include, who is running it and their contact information. It has very specific language and if you aren’t running employment credit, it should be removed from the verbiage.
Signature required: Yes
Who keeps it: Employer
FCRA Disclosure for Investigative Consumer Report
This separate form is required to be given to an applicant if an employer is having a screening firm do a reference check or an employment verification. In fact, this is one of the top FCRA violations – any combination of information in the disclosure forms.
Signature required: Yes, if applicable
Who keeps it: Employer
Applicant Authorization & Acknowledgement Form
This form is where you actually obtain an applicant’s permission to run the background check. The first two forms are simply sharing or ‘disclosing’ information, not obtaining permission.
Signature required: Yes
Who keeps it: Employer
State and Local Law Notices
This document provides an outline of specific State or local law notices and must be provided if applicable.
Signature required: No
Who keeps it: Applicant
Summary of Your Rights Under the Fair Credit Reporting Act
This document comes from the CFPB (Consumer Financial Protection Bureau) which along with the FTC, are accountable for protecting consumer rights in a variety of areas. The last update was in March of 2023.
Signature required: No
Who keeps it: Applicant
Credit Notices (CA & VT Only)
CA & VT require special Credit Notices for running Credit Reports. And, it’s important to note that if only one form is incorrect, or you didn’t have the latest version of the FCRA Summary of Rights, you are violating a consumer’s rights, which can easily result in litigation.
Signature required: No
Who keeps it: Applicant
Common Applicant Authorization Forms Violations
Many FCRA lawsuits arise from technical mistakes in applicant authorization and disclosure forms. The good news is that most are preventable once you know what to avoid.
Use this quick checklist to make sure your forms are compliant:
Avoid These Mistakes:
- Including liability waivers or release of claims for any party
- Asking criminal history questions on the authorization or disclosure forms
- Using tiny or hard-to-read fonts
- Combining disclosure and authorization on the same document
- Adding extra acknowledgments, such as policy statements or “information accuracy” confirmations
- Using outdated forms or missing state-specific notices
- Failing to list your screening provider’s full contact information (address, phone, website)
- Stating that consent applies to background checks conducted after employment begins
Instead, You Should:
- Keep each form separate and clearly labeled
- Include all required state and federal summaries of rights
- List only the specific reports you’ll actually run — criminal, education, credit, etc.
- Review and update your forms annually or when the CFPB releases a new notice
Remember: even small language errors or combining forms improperly can expose employers to class-action lawsuits.
Keep Your Organization Protected
Providing the correct applicant forms can ultimately protect your organization from legal and financial risk. FCRA compliance falls on the employer, not your background check vendor. Taking the time to review your forms, regularly update them, and make sure they meet both federal and state requirements can save you from costly litigation further down the road.
If you’re unsure whether your forms are compliant or you’d like to confirm that your process meets every FCRA requirement, our team can help review your documentation and keep you protected.
