$2.6 Million Judgement Against Background Screener for FCRA Violations

Nick Fishman

 

The FTC has just announced that it reached a $2.6 million settlement with one of the largest background screening companies in our industry for violation of Fair Credit Reporting Act (FCRA) guidelines which mandate reasonable procedures to ensure maximum possible accuracy of the information it reports.

I’ve decided to share this, not to pile on to a competitor (I’ve intentionally withheld their name), but to highlight a employment background check practice we simply don’t believe in.  According to their release:

“The FTC alleges that in many cases, when it provided consumer reports to employers, [Company] failed to take reasonable steps to ensure that the information in the reports was current and reflected updates, such as the expungement of criminal records. Because of this, the FTC charged, employers sometimes received information that incorrectly listed criminal convictions on individuals’ records.

In addition, according to the FTC’s complaint, [Company] failed to follow reasonable procedures to prevent the same criminal offense information from being included in a consumer report multiple times, failed to follow reasonable procedures to prevent obviously inaccurate consumer report information from being provided to employers, and in numerous cases even included the records of the wrong person. The FTC alleged that these failures led to consumers being denied employment or other employment-related benefits.”

Since our inception we have shunned the practices listed above.  We have always felt that engaging these methods for employee background checks ultimately hurts both employers and their job applicants.  Why report something you can’t stand behind? It is better to get the information right the first time than to report something in a nanosecond that could very well be inaccurate or flawed.  Our No Shortcuts approach to background screening has been well documented in this area and this settlement would appear to validate those methods.

Further, the practice of reporting information that is not verified and validated has often led to our industry being portrayed in a negative light.  It is important to point out that there is no admission of guilt in this settlement and we are not privy to all the facts in this particular case.  However, there are far too many of us that eschew the quick profits that can be attained by skipping the manual practice of ensuring what is reported is accurate each and every time.  I am hopeful that this settlement will change the behaviors of the few that continue to engage in these practices.

 

Nick Fishman
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Nick Fishman

Nick Fishman is the co-founder of EmployeeScreenIQ, a leading, global employment background screening provider, and serves as the company’s executive vice president and chief marketing officer. He pioneered the creation of EmployeeScreen University, the #1 educational resource on employment background checks for human resources, security and risk management professionals. A recognized industry expert, Nick is a frequent author, presenter and contributor to the news media. Nick is also a licensed private investigator in the states of Ohio and Texas.
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  • Bert

    Why would you leave the name out of you post when everyone and anyone in the industry can find out in one second who is being sued and probably already knows? HireRight is a just a punching bag for bad background screening practices.

  • Name Steve Gonzalez

    Good, measured comment, Nick. The more important larger picture issue is always following the appropriate course – doing the right thing for the client employers, individuals and the industry.