ARTICLE
5 November 2024

CFPB Warns Employers That Use Of Third-Party Consumer Reports Must Be Fair

CO
Cozen O'Connor

Contributor

Founded in 1970, Cozen O’Connor has more than 925 attorneys practicing internationally in 32 cities across North America and Europe. We are a full-service firm with award-winning practices in litigation, business law, and government relations, and our attorneys have experience operating in all sectors of the economy. Our diverse client list includes global Fortune 500 companies, middle-market firms poised for growth, ambitious startups, and high-profile individuals.

The CFPB issued guidance regarding "Background Dossiers and Algorithmic Scores for Hiring, Promotion, and Other Employment Decisions."
United States Consumer Protection
  • The CFPB issued guidance regarding "Background Dossiers and Algorithmic Scores for Hiring, Promotion, and Other Employment Decisions."
  • In the guidance, the CFPB warns that, like credit reports used by lenders to make lending decisions, third-party AI and background dossiers that convey scores about workers are often governed by the Fair Credit Reporting Act (FCRA) when used by employers to make hiring, promotion, reassignment, or retention decisions.
  • The CFPB emphasizes that employers utilizing such reports must obtain worker consent, provide transparency about the data used before any adverse decisions, and allow workers to dispute inaccurate information, and encourages employers to review their current practices regarding the use of third-party consumer reports to ensure compliance with FCRA requirements.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy.

Learn More