Databases and the People Who Love Them

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The Federal Trade Commission (FTC), has put ten data brokers on notice for possible violations of the Fair Credit Reporting Act (FCRA) after flaws were exposed during a mystery shopping operation. Employees of the FTC posed as customers seeking background information about individuals in order to make decisions about things such as creditworthiness, eligibility for insurance, and also suitability for employment. The operation consisted of contacting over forty companies, ten of which were found to be in violation of the FCRA by offering to provide information on consumers without any sort of compliance.

ftcThe FCRA requires any information which may cause an adverse decision (for example: denying a person a job) to be confirmed as up to date and accurate as possible. The problem the FTC has identified is that the websites offering public record data may not be clearly stating the permissible purposes for which the information can be used or giving the customer a false sense of security that the information provided can be used for employment decisions, among other permissible purposes of the FCRA.

While the FTC did not issue an official notice to the ten data brokers, it is clear through their actions that they are following through on their mission to protect the rights of consumers. The letters they sent were a reminder to these companies of the need to evaluate their practices so they remain in compliance with the FCRA and state laws.

It’s understandable why a public record database would be a temptation to employers looking to screen employees. After all, the data is usually sold at a cheap price and turned around instantaneously. The reality is, databases are nowhere near 100% accurate and failure to comply with the FCRA will eventually land an employer in court fighting either a class action lawsuit or handing over a large settlement check.

Backgrounds Online takes pride in staying up to date with the changing laws regulating employment screening, and will continue to do so. We also have the forms you need to stay in line with the FCRA easily accessible for our clients. It is our priority to make sure the information we provide to you is accurate, up to date and, most importantly, obtained in a legal fashion. Should you have any questions about compliance with the FCRA, we are here to answer them.