Mobile Background Screening Apps May Violate FCRA, Warns the FTC

Background Check AppsSure, there’s an app for that. But that doesn’t mean you should be using it.

Running a quick background check on the blind date you’ve been set up with might be a good way (or not, remember it’s going to be a database search) to use the latest mobile background screening apps, but the FTC fears employers might be using these apps for employment screening purposes — and that could very easily violate the Fair Credit Reporting Act. (Not to mention it doesn’t make any business sense given the gaping holes in the data sources.)

The FTC’s recent warnings to marketers of mobile background screening apps offer good reasons for employers to steer clear.

Here’s the logic behind these warnings:

The Fair Credit Reporting Act (FCRA) applies in situations where employers use a consumer reporting agency (background screening company) to obtain background checks for employment-related purposes. The FTC is saying that the mobile apps that supply such information may qualify as CRAs under the Act.

The apps, which are marketed by consumer reporting agencies, include criminal histories, which the FTC says “bear on an individual’s character and general reputation and are precisely the type of information that is typically used in employment and tenant screening.” Because of this, it is reasonable for the FTC to assume that employers may be using these mobile apps for employment screening purposes which would then require the CRAs to meet several obligations:

  • Take reasonable steps to ensure the user of each report has a ‘permissible purpose’ to use the report.
  • Take reasonable steps to ensure the maximum possible accuracy of the information conveyed in its reports.
  • Provide users of its reports with information about their obligations under the FCRA, such as their obligation to provide notice to employees and applicants of any adverse action taken on the basis of a consumer report.

There’s no app for all of that.

Employers Beware…

Mobile background screening apps can be attractive as a cheap, quick alternative to traditional background checks but the short-cut can come with a steep price tag. Read our recent blog post for more on this subject. http://www.proformascreening.com/blog/2011/08/cheap-background-screening/

To learn more, read the FTC press release here: http://ftc.gov/opa/2012/02/mobileapps.shtm

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About Michael Gaul

A security industry professional since 1988, Michael has extensive expertise in the fields of human capital risk management, physical security, and background screening process management. Michael leads Proforma’s sales, marketing, and strategic customer relations efforts.
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