Employment background firm wrongly reported convictions on consumers’ records, CFPB alleges

A sample record from BackgroundCheck.som
A sample record from BackgroundCheck.som

It’s every job applicant’s nightmare. You are in the running for a new position, then an HR representative calls with bad news: You’ve failed a background check. The firm thinks you have a criminal record! It’s a typical 21st Century database screw-up, but by the time you run down the error, the job is long gone. And you’re left wondering how many other opportunities were crushed by the data error. Thankfully there are other background check companies that employees might want to check out if they want to find out more about their potential employees, for example, something like this website among others might be a good alternative.

On Thursday, the Consumer Financial Protection Bureau alleged that one of the nation’s largest employment background companies, General Information Services, put thousands of job applicants at risk of ordeals like that. The firm, which operates BackgroundChecks.com, sells more than 10 million employment background reports every year — but it did a poor job of preventing errors on its reports, the CFPB alleges. In a consent order made public Thursday, the firm agreed to pay $10.5 million to injured consumers and pay a $2.5 million penalty.

“General Information Services and its affiliate failed to take basic steps to provide accurate background screening reports to employers about job applicants,” said CFPB Director Richard Cordray.

About 10,000 consumers disputed their General Information Services reports from 2011 to 2014 and uncovered errors, the CFPB says.

In more than 6,000 cases, “(the firm) reported a criminal record that did not belong to the consumer, including, without limitation, those criminal records that (the firm) could not confirm belonged to the consumer based on personal identifiers…or reported inaccurate criminal record information about the consumer, including, without limitation, expunged records, dismissed charges, nolo prosequi records reported as convictions (the prosecutor declined to pursue the case), or records with incorrect disposition data,” the CFPB alleged.

General Information Services had inadequate procedures for avoiding errors, the CFPB said. It did not require employers to include middle names of job applicants, for example, which resulted in “mismatched criminal record information.”

It also failed to “identify root causes of accuracy errors,” didn’t notice patterns of mistakes, and didn’t test the accuracy of non-disputed reports.

In a statement on its website, General Information Services admitted no wrongdoing.

“The Bureau alleged weaknesses in certain of the companies’ internal procedures for creating background reports. Based on the companies’ analysis of the weaknesses alleged in the consent order and all governing law and regulatory guidance, the companies believe that they complied with the Fair Credit Reporting Act’s requirement to use reasonable procedures to ensure maximum possible accuracy in creating background reports,” it said. “Regardless, the companies remain committed to the highest achievable levels of accuracy in their reports and acknowledge that every background screening agency must engage in continuous improvement. Therefore, the companies take the Bureau’s allegations very seriously and have agreed to the terms that the order imposes.”

The CFPB’s consent order offers one detailed example of what it says were not “reasonable procedures” for preventing errors.

“GIS tests two reports approximately every six weeks for each of its internal and external researchers. The process involves reassigning the two chosen reports to the same researcher to rerun the reports and confirm that the same records are returned. The procedures is not reasonable for several reasons. First, it tests only whether the records identified in a new search of potential matches are the same records identified in the original search — not whether the information included in the final report is lawful. Second, it fails to assess why certain non-reportable or mismatched information is included in reports. Third, testing two cases per researcher every six weeks is not based on any predictive algorithm or tested method.”

For information on obtaining an employment background report from BackgroundChecks.com, or on disputing information in a report, visit this website.



About Bob Sullivan 1318 Articles
BOB SULLIVAN is a veteran journalist and the author of four books, including the 2008 New York Times Best-Seller, Gotcha Capitalism, and the 2010 New York Times Best Seller, Stop Getting Ripped Off! His latest, The Plateau Effect, was published in 2013, and as a paperback, called Getting Unstuck in 2014. He has won the Society of Professional Journalists prestigious Public Service award, a Peabody award, and The Consumer Federation of America Betty Furness award, and been given Consumer Action’s Consumer Excellence Award.

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