Mobile Apps Marketers Offering Criminal Background Checks To Settle FTC Charges for Violating Fair Credit Reporting Act

In resolving the first Fair Credit Reporting Act (FCRA) case involving mobile “apps,” marketers of mobile applications that compiled and sold criminal record background check reports as job applicant screening tools have agreed to settle Federal Trade Commission (FTC) charges that they operated as consumer reporting agencies (CRAs) without taking consumer protection measures required by the FCRA.  The FTC’s settlement order, which prohibits the companies involved from future FCRA violations, is available at

According to the FTC complaint, the mobile app marketers failed to ensure that the background check information they sold was accurate and would be used only for legally permissible purposes. The FTC also alleged that the companies failed to tell users of their criminal record reports about obligations under the FCRA, including the requirement to notify consumers if an adverse action was taken against them based on a report. As alleged in the complaint, the mobile app marketers used disclaimers stating:

  • That they were not FCRA compliant;
  • That their products were not to be considered screening products for employment, insurance, and credit screening; and
  • That anyone who used their reports for such purposes assumed sole responsibility for FCRA compliance.

However, according to the FTC’s complaint, these disclaimers were not enough to avoid liability under the FCRA because the company advertised and expected that its reports could be used for employment purposes. The FTC settlement order bars the respondents from furnishing a consumer report to anyone they do not have reason to believe has a “permissible purpose” to use the report, failing to take reasonable steps to ensure the maximum possible accuracy of the information conveyed in its reports, and failing to provide users of its reports with information about their obligations under the FCRA. For more information about the settlement, visit

The FTC will publish a description of the consent agreement package in the Federal Register subject to public comment through February 11, 2013 when the FTC will decide whether to make the proposed consent order final. The FTC notes a consent order is for settlement purposes only and does not constitute an admission that the law has been violated. Comments may be submitted electronically to or mailed to: Federal Trade Commission, Office of the Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue, N.W., Washington, DC 20580.

Users of mobile phone apps offering “instant” background checks on anyone at any time with little effort or cost should be aware that while these services are fast, cheap, and easy to use, they may not provide entirely accurate information, according to the white paper ‘Background Check Mobile Phone Apps and Instant Background Check Web Sites: Fast and Easy, But Are They Accurate?’ The complimentary white paper, co-written by Attorney Lester Rosen, Founder and CEO of Employment Screening Resources (ESR), is available at

The trend of the federal government increasing action against CRAs using background checks in violation of FCRA was Trend Number 9 of the 6th Annual ‘ESR Top Ten Background Check Trends for 2013’ compiled by Attorney Rosen. The full list of trends is available at For information about background checks, visit Employment Screening Resources (ESR) – ‘The Background Check Authority’ and nationwide screening firm accredited by the National Association of Professional Background Screeners (NAPBS®) – at or call Toll Free 888.999.4474.


About Employment Screening Resources (ESR):

Founded by safe hiring expert Attorney Les Rosen in 1997, Employment Screening Resources (ESR) – ‘The Background Check AuthoritySM’– provides accurate and actionable information that empowers employers to make informed hiring decisions for the benefit of their organizations, employees, and the public. CEO Rosen literally wrote the book on background checks with “The Safe Hiring Manual” and ESR is accredited by The National Association of Professional Background Screeners (NAPBS), a distinction held by a small percent of screening firms. Employers choosing ESR know they have selected an agency meeting the highest industry standards. To learn more about ESR, visit or call toll free 888.999.4474.

About ESR News:

The Employment Screening Resources (ESR) News blog – ESR News – provides employment screening information for employers, recruiters, and jobseekers on a variety of topics including credit reports, criminal records, data privacy, discrimination, E-Verify, jobs reports, legal updates, negligent hiring, workplace violence, and use of search engines and social network sites for background checks. For more information about ESR News or to send comments or questions, please email ESR News Editor Thomas Ahearn at To subscribe to the ESR News Blog Feed, visit To subscribe to the complimentary ESRcheck Report monthly newsletter, please visit