U.S. Government Agencies Will Take Closer Look at Background Screening Industry in 2020

ESR Top Ten Background Check Trends
ESR Top Ten Background Check Trends

Written By ESR News Blog Editor Thomas Ahearn

United States government agencies such as the Consumer Financial Protection Bureau (CFPB), the Federal Trade Commission (FTC), and the Equal Employment Opportunity Commission (EEOC) will take a closer look at the background screening industry in 2020, according to the “ESR Top Ten Background Check Trends” for 2020 compiled by leading global background check firm Employment Screening Resources® (ESR).

In November of 2019, the CFPB – an agency enforcing federal consumer financial laws – filed a proposed Stipulated Judgment and Order requiring a background screening company to pay $8.5 million to resolve allegations of violations of the federal Fair Credit Reporting Act (FCRA). The penalty included $6 million in monetary relief paid to affected consumers and a $2.5 million civil money penalty paid to the CFPB.

In July of 2019, the FTC – an agency that protects and educates consumers – reached a settlement with a background screening firm over false claims of participation in the EU-U.S. Privacy Shield framework that enables the legal transfer of consumer data from the European Union to the United States. “Enforcement of the Privacy Shield framework is a priority of the FTC,” one FTC Director stated in a press release.

In 2019, the EEOC – which advances opportunity in the workplace by enforcing federal laws prohibiting employment discrimination – announced Dollar General agreed to pay $6 million and that Pier 1 Imports would pay $20,000 to settle charges of discrimination alleging violations of Title VII of the Civil Rights Act of 1964 during their background check processes due to disparate impact on black job applicants.

The CFPB, FTC, and EEOC will be more proactive in watching the background screening industry in 2020. In December 2019, the FTC and CFPB held an “Accuracy in Consumer Reporting” workshop that examined, among other things, issues affecting the accuracy of background screening reports. The EEOC will also continue to enforce its guidance on the use of criminal records by employers for employment decisions.

Data Breach concerns have led to government oversight of consumer reporting agencies (CRAs).In July 2019, the FTC and CFPB announced a $700 million settlement with nationwide CRA Equifax for a data breach impacting 147 million Americans. In March 2019, the Government Accountability Office (GAO) issued a report recommending stronger oversight of CRAs to protect consumers from data breaches.

In addition, states will pass security and privacy related laws in response to data breaches and global privacy trends like the General Data Protection Regulation (GDPR) regulating the transfer of EU personal information. For example, New York passed the SHIELD (Stop Hacks and Improve Electronic Data Security) Act in 2019 while the California Consumer Privacy Act (CCPA) took effect in January of 2020.

“The need for background screening firms that handle the personal data of job applicants to ensure information security has become mission critical,” Attorney Lester Rosen, the founder and chief executive officer (CEO) of Employment Screening Resources® (ESR), explained in an article from the Society for Human Resource Management (SHRM), the world’s largest HR professional society.

Employment Screening Resources® (ESR) – which Rosen founded in the San Francisco, California area in 1997 – is accredited by the Professional Background Screening Association (PBSA), undergoes annual SOC 2 audits, follows CFPB, FTC, and EEOC regulations, complies with the FCRA, and adheres to the EU-U.S. and Swiss-U.S. Privacy Shield framework. ESR was also named a top screening firm by HRO Today Magazine.

Since 2008, Employment Screening Resources® (ESR) has selected influential and emerging background check trends that have impacted the background screening industry. Each trend for 2020 will be announced via the ESR News Blog and listed on the “ESR Top Ten Background Check Trends” web page available 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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