FTC - Mobil Apps May Violate FCRA
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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.
ISPLA Director of Government Affairs
Your Proactive Voice from State Capitols to the Nation's Capitol
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