CFPB Issues New Guidance to Protect Workers from Digital Surveillance Using Third-Party Consumer Reporting Tools

The Consumer Financial Protection Bureau (CFPB) has issued guidance to protect workers from digital surveillance. The guidance states that companies using background dossiers, AI powered or algorithmic scoring tools, and other third-party consumer reports must adhere to the Fair Credit Reporting Act (FCRA). These third-party consumer reporting tools can be used to predict worker behavior (including the likelihood that an employee will join a union or leave their job), reassign workers based on employee performance and availability, issue automated disciplinary actions to employees (often without human oversight), and evaluate workers’ social media activity. Under the CFPB’s new guidance, employers must obtain consent to use third-party consumer reporting tools from employees, allow employees to dispute inaccurate information contained in the reports, provide transparency to workers when data is used in adverse employment decisions, and limit how employees share and use the information employers obtained by using third-party consumer reporting tools. 

EPIC regularly engages with the CFPB on consumer protection issues. For example, EPIC filed comments in support of the CFPB’s proposals to prohibit the inclusion of medical debt on credit reports, comments on the CFPB’s proposed Section 1033 rules urging the CFPB to adopt strong rules that protect privacy and empower consumers, and comments on the CFPB’s proposed revisions to Fair Credit Reporting Act rules, which would clarify that data brokers must comply with FCRA.