FTC Approves Final Order Settling Charges against Criminal Background Check Report Marketers

The Federal Trade Commission (FTC) has approved a final order settling charges that Filiquarian Publishing LLC, Choice Level LLC, and their CEO operated as a consumer reporting agency (CRA) that provided criminal background check reports to be used for employment decisions without taking consumer protection measures required by the Fair Credit Reporting Act (FCRA).  A press release from the FTC about the final order is available at http://www.ftc.gov/opa/2013/05/filiquarian.shtm.

The administrative complaint from the FTC alleged that Filiquarian Publishing LLC, Choice Level LLC, and their CEO failed to ensure that the information they sold was accurate and would be used only for legally permissible purposes. They also allegedly failed to tell users of the criminal record reports about their FCRA obligations, including a requirement to notify consumers if an adverse action was taken against them based on a background check report. The administrative complaint from the FTC is available at http://www.ftc.gov/os/caselist/1123195/130501filquariancmpt.pdf.

According to the complaint, Filiquarian has operated a series of mobile applications (“apps”) advertised to consumers as a “quick criminal background check for convictions” since at least 2010. Filiquarian represented that the apps could access hundreds of thousands of criminal records, and that users could conduct a search on potential employees. Choice Level provided the criminal records to Filiquarian that were accessed by the mobile apps and – in light of the common ownership of Choice Level and Filiquarian – was aware that the criminal records provided would be used for employment purposes.

Under Section 603(f) of the FCRA, 15 U.S.C. § 1681a(f), a company is a consumer reporting agency (“CRA”) if it assembles or evaluates information on consumers for the purpose of furnishing “consumer reports” to third parties. According to Section 603(d) of the FCRA, 15 U.S.C. § 1681a(d)(1), consumer reports are communications that include information relating to an individual’s character, reputation, or personal characteristics and are used or expected to be used for employment, housing, credit, or other similar purposes. To view the full text of the FCRA, visit http://www.ftc.gov/os/statutes/031224fcra.pdf.

The settlement prohibits the respondents from furnishing a consumer report to anyone they do not have reason to believe has a “permissible purpose” to use the report and also requires them to take reasonable steps to ensure the maximum possible accuracy of the information conveyed in its reports, and to provide users of its reports with information about their FCRA obligations.  Violations of the consent order may be subject to civil penalties of up to $16,000 per violation. The decision and final order from the FTC is available at http://www.ftc.gov/os/caselist/1123195/130501filquariando.pdf.

Mobile phone apps offering “instant” background checks on anyone with little effort or cost may not provide entirely up-to-date or complete information, according to the white paper ‘Background Check Mobile Phone Apps and Instant Background Check Web Sites: Fast and Easy, But Are They Accurate?’ Results from these apps may include both “false positives” and “false negatives” and could lead to a false sense of security for users. The complimentary white paper, co-authored by Attorney Lester Rosen, CEO of Employment Screening Resources® (ESR), is available at http://www.esrcheck.com/Download/.

Employment Screening Resources® (ESR) – ‘The Background Check Authority®’ – is a nationwide background screening provider accredited by The National Association of Professional Background Screeners (NAPBS®). For more information about FCRA compliant background checks from Employment Screening Resources® (ESR), please visit http://www.esrcheck.com or call Toll Free 888.999.4474.

Sources:

http://www.ftc.gov/opa/2013/05/filiquarian.shtm

http://www.ftc.gov/os/caselist/1123195/130501filquariancmpt.pdf

http://www.ftc.gov/os/statutes/031224fcra.pdf

http://www.ftc.gov/os/caselist/1123195/130501filquariando.pdf

About Employment Screening Resources® (ESR):

Founded by safe hiring expert Attorney Les Rosen in 1997, Employment Screening Resources® (ESR) – ‘The Background Check Authority®’– 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 http://www.esrcheck.com 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 tahearn@esrcheck.com. To subscribe to the ESR News Blog Feed, visit http://www.esrcheck.com/wordpress/feed/. To subscribe to the complimentary ESRcheck Report monthly newsletter, please visit http://www.esrcheck.com/Newsletter/.