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ISPLA NEWS: Criminal Background Screeners Violate FCRA

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  • Peter Psarouthakis
    Marketers of Criminal Background Screening Reports To Settle FTC Charges They Violated Fair Credit Reporting Act Pitched Mobile Apps Offering Job Applicant
    Message 1 of 1 , Jan 10, 2013
      Marketers of Criminal Background Screening Reports To Settle FTC Charges
      They Violated Fair Credit Reporting Act

      Pitched Mobile Apps Offering Job Applicant Screening Tools

      An enterprise that compiled and sold criminal record reports has agreed to
      settle Federal Trade Commission charges that it operated as a consumer
      reporting agency without taking consumer protection measures required by the
      Fair Credit Reporting Act (FCRA). The
      <http://www.ftc.gov/os/caselist/1123195/130110filquarianagree.pdf> FTC's
      settlement order, which prohibits the respondents from future FCRA
      violations, resolves the agency's first FCRA case involving mobile apps.

      According to an
      administrative complaint filed by the FTC, Filiquarian Publishing LLC,
      Choice Level LLC, and their CEO, Joshua Linsk, failed to ensure that the
      information they sold was accurate and would be used only for legally
      permissible purposes. The FTC also alleged that they failed to tell users
      of their criminal record reports about their obligations under the FCRA,
      including the requirement to notify consumers if an adverse action was taken
      against them based on a report.

      According to the FTC, Filiquarian claimed consumers could use its mobile
      apps to access hundreds of thousands of criminal records and conduct
      searches on potential employees. One app stated, "Are you hiring somebody
      and wanting to quickly find out if they have a record? Then Texas Criminal
      Record Search is the perfect application for you." Consumers who paid 99
      cents to download one of its apps from iTunes or the Google Android store
      (now GooglePlay) could conduct an unlimited number of searches for criminal
      records within a particular state or county. Choice Level provided the
      criminal records to Filiquarian that were accessed via Filiquarian's mobile

      As alleged in the complaint, both companies used disclaimers stating that
      they were not FCRA compliant; that their products were not to be considered
      screening products for employment, insurance, and credit screening; and that
      anyone who used their reports for such purposes assumed sole responsibility
      for FCRA compliance. According to the FTC's complaint, these disclaimers are
      not enough to avoid liability under the FCRA because the company advertised
      and expected that its reports could be used for employment purposes.

      The settlement order bars the respondents from furnishing a consumer report
      to anyone they do not have reason to believe has a "permissible purpose" to
      use the report, failing to take reasonable steps to ensure the maximum
      possible accuracy of the information conveyed in its reports, and failing to
      provide users of its reports with information about their obligations under
      the FCRA.

      To learn more about mobile apps, read the FTC's
      Understanding Mobile Apps: Questions and Answers. Business owners should
      read <http://business.ftc.gov/documents/bus81-marketing-your-mobile-app>
      Marketing Your Mobile App: Get It Right from the Start and
      de-business> Protecting Personal Information: A Guide for Business. To
      learn more about background screening reports, and employers' obligations
      and employees' rights under the FCRA, read
      rs-need-know> Using Consumer Reports: What Employers Need to Know,
      Employment Background Checks, and
      <http://www.consumer.ftc.gov/articles/0269-what-know-when-you-look-job> What
      to Know When You Look for a Job, and see the video,
      for-a-job/1807437462001> What to Know When Looking for a Job.

      Bruce Hulme

      ISPLA Director of Government Affairs


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