The Federal Trade Commission submitted written testimony to the U.S. Commission on Civil Rights regarding the Fair Credit Reporting Act (FCRA) and the use of consumer reports in employment.
The testimony highlights the FTC’s law enforcement and education efforts in this area. The FTC in August took action against HireRight Solutions Inc., an employment background screening company, resulting in a settlement that included $2.6 million in civil penalties and an order barring illegal practices.
The FTC alleged that the company provided reports that included inaccurate information, such as criminal records pertaining to someone other than the subject of the report, and failed to comply with the FCRA’s dispute provisions.
The FTC also took action in June against Spokeo Inc., a data broker, resulting in a settlement that included $800,000 in civil penalties and an order barring future law violations.
The FTC alleged that the company sold detailed profiles of consumers to companies in the human resources, recruiting and employment background screening industries and failed to take reasonable steps to ensure that the reports it sold would be used only for purposes allowed by law, ensure the reports were accurate, and inform users of the reports of their FCRA obligations.
The testimony also describes some of the legal rights and obligations prescribed by the FCRA when consumer reports are used for employment purposes, including the following:
• Consumer reporting agencies must have reasonable procedures to assure maximum possible accuracy of reports;
• They must notify employers of their obligations under the FCRA;
• Employers have to obtain the written consent of applicants and employees before using consumer reports for employment purposes;
• Employers must provide notice to applicants and employees along with a summary of their rights under the FCRA before taking an adverse action against them based on a consumer report; and
• Consumers have the right to obtain a copy of their consumer report and dispute erroneous or incomplete information with the consumer reporting agency.
The FCRA promotes the accuracy, fairness, and privacy of information in the files of consumer reporting agencies.