Background Checks

By Paul Barada

The law firm of Hunton & Williams recently issued a news item that illustrates how far reaching and painful failure to faithfully observe the Fair Credit Reporting Act can be.   It seems that a well-known background checking firm was not following several of the requirements outlined in the Fair Credit Reporting Act and was sanctioned heavily for it.
According to the Federal Trade Commission, the firm was cited for “(1) failing to ensure maximum accuracy of its background reports, specifically noting that some background reports failed to reflect expungement* of criminal records or provided obviously erroneous consumer report information (2) failing to provide consumers with access to information in their files and closed dispute investigations without written notice, and (3) failing to follow requirements that background screeners who use public information notify consumers that such information is reported or to ensure the reported information is complete and up-to-date.”
It’s obvious this company hasn’t been doing a county-specific check to verify any of the information contained in a multistate data base.  A county-specific check is clearly the best source for the most accurate data, but it requires a little more time and effort.  It’s also obvious that this company is merely pulling information from a multistate data base and not verifying any of it before sending it to the client.
As a result of what I would consider to be sloppy work, the Federal Trade Commission has imposed a fine of $2.6 million dollars on this background checking company!
Barada Associates’ reputation, on the other hand, has been built on customer service and the accuracy of our work – and we scrupulously follow all the requirements of the Fair Credit Reporting Act.

*Expungements may prove to be problematic for Credit Reporting Agencies moving forward.  States such as  Indiana have enacted legislation that allows defendants convicted of certain crimes to petition courts to  seal certain convictions.  In fact, Indiana specifically provides that, once sealed, these defendants may  state that they have not been convicted of those crimes on any document, which presumably includes  employment applications.  Effective July 1st, 2013, the Attorney General will have the power to seek civil  penalties for unlawful disclosure of sealed records, and aggrieved individuals will be able to recover  damages and attorney fees.

Nevertheless, mistakes happen, and CRA’s may find themselves in possession of information indicating  convictions that have been expunged, sealed, or otherwise taken care.  As more and more defendants take  advantage of these opportunities, more and more convictions will be sealed, expunged, or pardoned.  The  practical impact for Credit Report Agencies is that, in addition to collecting information about  convictions, CRA’s must now carefully review court records to ensure that the information that they are  reporting not only is accurate as of the date of conviction, but also has not been subsequently sealed,  pardoned, or expunged.  (Provided by Paul Barada, Jr., Attorney)