2021Criminal RecordsESR
ESR Top Ten Background Check Trends
Employment Screening Resources® (ESR) Top Ten Background Check Trends for 2021

Written By Employment Screening Resources® (ESR)

The accuracy of job applicant criminal records used by employers and consumer reporting agencies (CRAs) to conduct background checks will become a new area of litigation filed over alleged violations of the Fair Credit Reporting Act (FCRA) that regulates background screening, according to the “ESR Top Ten Background Check Trends” for 2021 compiled by leading global background check firm Employment Screening Resources® (ESR).

Enacted by Congress in 1970, the FCRA (15 U.S.C § 1681 et seq.) is a federal law that promotes the accuracy, fairness, and privacy of consumer information contained in the files of CRAs, protects consumers from the willful and/or negligent inclusion of inaccurate information in their consumer reports, and regulates the collection, dissemination, and use of consumer information, including consumer credit information.

Under FCRA Section 607(b), all CRAs must “follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.” When it comes to public records that include criminal records, in particular, there is even a higher obligation under FCRA Section 613. CRAs can lose millions of dollars if they do not “follow reasonable procedures to assure maximum possible accuracy.”

On December 8, 2020, a tenant screening company that provides background check reports to property management companies agreed to pay $4.25 million as part of a settlement with the Federal Trade Commission (FTC) over allegations the firm failed to follow reasonable procedures to ensure the accuracy of its reports about potential tenants in violation of the FCRA, according to a press release from the FTC.

The complaint filed on behalf of the FTC by the U.S. Department of Justice (DOJ) claimed the tenant screening company violated the FCRA by failing to implement reasonable procedures to ensure that criminal and eviction records received from a third-party vendor were accurate before including the information in tenant screening reports, and including eviction or non-conviction criminal records more than seven years old in reports.

Companies that provide inaccurate information to CRAs can also be sued. On December 22, 2020, the Consumer Financial Protection Bureau (CFPB) issued a consent order that imposed a $4.75 million civil money penalty against an originator and servicer of nonprime auto loans and leases that furnished credit information on auto loans it serviced to CRAs to address alleged violations of the FCRA, according to a press release from the CFPB.

The order found that the consumer loan data furnished by the company to CRAs allegedly contained numerous systemic errors that, in many instances, could have negatively impacted consumers’ credit scores and access to credit. The CFPB claimed the company furnished consumer loan information to CRAs that it knew or reasonably should have known was inaccurate and failed to promptly update and correct information furnished to CRAs.

In December 2019, the FTC and CFPB – who both enforce the FCRA – held an “Accuracy in Consumer Reporting Workshop” with representatives from CRAs, trade associations, furnishers, and consumer advocacy groups to examine issues affecting the accuracy of credit reports and background screening reports, and discuss changes in legal requirements and technological developments that may affect the accuracy of consumer reports.

The workshop included four panel discussions: “Panel 1: Furnisher Practices and Compliance with Accuracy Requirements,” “Panel 2: Current Accuracy Topics for Traditional Credit Reporting Agencies,” “Panel 3: Accuracy Considerations for Background Screening,” and “Panel 4: Navigating the Dispute Process.” A video recording of the workshop is available at https://ftc-workshop-accuracy-consumer-reporting.videoshowcase.net/.

The vast majority of employers value accuracy in background checks. In June 2020, the Professional Background Screening Association (PBSA) – a non-profit trade organization representing the interests of CRAs – released its 4th annual industry survey entitled “Background Screening: Trends and Uses in Today’s Global Economy” that revealed 96 percent of employers thought the accuracy of background checks was very important.

Also in 2020, the PBSA and the Consumer Data Industry Association (CDIA) worked together to develop Public Access Software Specifications (PASS) to facilitate the ability of court administrators to implement software that improves the quality, accuracy, and efficiency of public records. PASS would help courts meet the greater demand for public access to records and improve the accuracy and timeliness of background checks.

Employment Screening Resources® (ESR) – a leading global background check provider that was named the number one screening firm by HRO Today – offers a white paper on “21 Shortcuts & Traps that Can Lead to Inaccurate Criminal Records” that shows how some CRAs cut corners on reporting records and undermine the accuracy of the results which can lead to costly litigation. To learn more about ESR, visit www.esrcheck.com.

Since 2008, Employment Screening Resources® (ESR) has annually selected the “ESR Top Ten Background Check Trends” that feature emerging and influential trends in the background screening industry. Each of the top background check trends for 2021 will be announced via the ESR News Blog and listed on the ESR background check trends web page at www.esrcheck.com/Tools-Resources/ESR-Top-Ten-Background-Check-Trends/.

NOTE: Employment Screening Resources® (ESR) does not provide or offer legal services or legal advice of any kind or nature. Any information on this website is for educational purposes only.

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