The Days of Raw Criminal Database Reporting Are Waning

national criminal records databaseThe human resources community and the employment screening industry have been buzzing lately about the second largest Fair Credit Reporting Act settlement penalty in history recently handed down to a background screening provider for multiple FCRA violations.  The $2.6M settlement sent a resounding message that the practice of putting a name in a system and returning back whatever the raw results are, without any meaningful quality assurance filter, is no longer acceptable.  As if it ever was…

How Could Something So Right Go So Wrong?

What happened in this case is that the background screening company allegedly “failed to take reasonable steps to ensure that the information in the reports was accurate, current, and reflected updates, such as the expungement of criminal records.” Because of this, the FTC charged, “employers sometimes received information that incorrectly listed criminal convictions on individuals’ records.”

In addition, the FTC charged that the company, “failed to follow reasonable procedures to prevent the same criminal offense information from being included in a consumer report multiple times, failed to follow reasonable procedures to prevent obviously inaccurate consumer report information from being provided to employers, and in numerous cases even included the records of the wrong person.” An FTC press release goes on to add, “that these failures led to consumers being denied employment or other employment-related benefits.

It’s Called “Fair” for a Reason…

It’s no accident that the FCRA is named what it is. And just as the Act is intended to promote accuracy and fairness to consumers, those who are beholden to it must do the same. It’s not like this is some sort of only-if-it’s-convenient-for-you exercise. After all, the FCRA is a consumer protection statute.

Background screening companies are supposed to be protecting people on both sides of the hiring equation – employers and applicants alike.  When we protect applicants and employees, we’re inherently protecting the employers who trust us to supply appropriate information that aids in better hiring decisions. Meeting our FCRA obligations and operating in a manner consistent with not just the letter, but more importantly the spirit of the law, is the right thing to do.

Employers’ FCRA Obligations

When an employer hires a CRA (background screening company) to perform background checks or verifications on a prospective or current employee, that employer has certain obligations under the Act.  Employer obligations include providing FCRA and EEO Compliance Certification to the CRA, providing pre-background check disclosures and obtaining pre-background check authorizations, and taking required adverse action steps.

Background Screening Companies’ FCRA Obligations

CRAs (background screening companies) have corresponding obligations under FCRA. Probably the most important is reporting information with maximum possible accuracy. Additionally CRAs must provide the  consumer with information about him or her in their file, and have a process to verify the accuracy of information disputed by a consumer.

Verify Everything!

As we’ve pointed out numerous times in our blog, a “national criminal database search” (in quotes because it’s actually a misnomer) – one of the practices targeted by the FTC in its case against the penalized background screening company – should never be reported without proper quality assurance and without local-level court records verification. The database search process is complicated and filled with nuances as there is no one “national database” to search.  Each database requires its own set of filters, search methodology, and quality assurance, understanding that many contain inaccurate, incomplete, or outdated information.  For this reason, a background screening provider should never actually report the results of a national database search directly to an employer without verifying them first!

Our customers will never see the results of the national database search in our reports. Proforma uses database information as a research tool to inform us of where to look on the local level.  If a search of a database returns negative information, we dispatch research to the local court, to verify the accuracy and completeness prior to reporting potentially adverse information to our customer.

It’s about accuracy and completeness. What if someone had expunged something through the court but it is still in a database somewhere?  What about partial identifiers? What about felony arrests amended to misdemeanors or non-convictions.  What about database records of arrest information older than 7 years?  Information like this is potential poison to an otherwise qualified candidate or employee. Unfortunately these types of scenarios are common; ambiguous, incorrect, and incomplete information is reported all too often. And that’s simply not fair.

Cheaper and faster? Yes.  Fair? No.

In the end, it comes down to treating people fairly.  Employers must treat their applicants and employees with fairness or suffer the consequences.  Background screening companies must do the same on behalf of employers who trust them to handle the delicate activity of background checking. So while perhaps some of the actions that took place in the FTC’s case were arguably legal, actions like failing to verify data spewed out of a criminal database are clearly not fair.

If you are concerned that your background screening provider is failing to to meet their commitments and putting your company at risk in the process, give us a call. Proforma has always protected our clients and the rights of their applicants and employees.


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About MichaelGaul

Michael is a results-oriented marketing executive with over two decades of experience in employment screening, physical security, and business process management. Michael has deep experience in human capital risk management and a passion for educating business leaders and HR professionals on strategies that tangibly protect their interests. Michael serves on the Board of the Secure Cash and Transport Association (SCTA) and is a member of the Professional Background Screening Association (PBSA), and the American Society of Industrial Security (ASIS).
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