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FTC - Mobil Apps May Violate FCRA

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  • Peter Psarouthakis
    Permission is granted to re-post: FTC Warns Marketers That Mobile Apps May Violate Fair Credit Reporting Act Agency Sends Letter to Marketers of Six Apps for
    Message 1 of 1 , Feb 8, 2012
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      Permission is granted to re-post:

      FTC Warns Marketers That Mobile Apps May Violate Fair Credit Reporting Act

      Agency Sends Letter to Marketers of Six Apps for Background Screening

      The Federal Trade Commission warned marketers of six mobile applications
      that provide background screening apps that they may be violating the Fair
      Credit Reporting Act. The FTC warned the apps marketers that, if they have
      reason to believe the background reports they provide are being used for
      employment screening, housing, credit, or other similar purposes, they must
      comply with the Act.

      The companies that received the letters are Everify,
      <http://www.ftc.gov/os/2012/02/120207everifyletter.pdf> Inc., marketer of
      the Police Records app, InfoPay,
      <http://www.ftc.gov/os/2012/02/120207infopayletter.pdf> Inc., marketer of
      the Criminal Pages app, and Intelligator,
      <http://www.ftc.gov/os/2012/02/120207intelligatorletter.pdf> Inc., marketer
      of Background Checks, Criminal Records Search, Investigate and Locate
      Anyone, and People Search and Investigator apps.

      According to the FTC, some of the apps include criminal record histories,
      which 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. "If you have reason to believe that your background
      reports are being used for employment or other FCRA purposes, you and your
      customers who are using your reports for such purposes must comply with the
      FCRA," the letters say.

      The FCRA is designed to protect the privacy of consumer report information
      and ensure that the information supplied by consumer reporting agencies is
      accurate. Consumer reports are communications that include information on an
      individual's character, reputation, or personal characteristics and are used
      or expected to be used for purposes such as employment, housing or credit.
      Under the FCRA, operations that assemble or evaluate information to provide
      to third parties qualify as consumer reporting agencies, or CRAs. Mobile
      apps that supply such information may qualify as CRAs under the Act. CRAs
      must 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; and
      provide users of its reports with information about their obligations under
      the FCRA. In the case of consumer reports provided for employment purposes,
      for example, CRAs must provide employers with information regarding their
      obligation to provide notice to employees and applicants of any adverse
      action taken on the basis of a consumer report.

      According to the letters, the agency has made no determination whether the
      companies are violating the FCRA, but encourages them to review their apps
      and their policies and procedures to be sure they comply with the FCRA.

      Bruce Hulme
      ISPLA Director of Government Affairs
      Your Proactive Voice from State Capitols to the Nation's Capitol

      [Non-text portions of this message have been removed]
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