Alert August 21, 2012

FTC Imposes Fine Against Employment Screening Company for FCRA Violations

The FTC announced it has entered into a stipulated final judgment and order with a consumer reporting agency that provided background screening (e.g., criminal history reports) to employers, for violations of the Fair Credit Reporting Act and the Federal Trade Commission Act. In its complaint, which was filed concurrently with the final judgment and order, the FTC alleged that the consumer reporting agency failed to follow reasonable procedures to assure maximum possible accuracy for the information contained in the consumer report (e.g., multiple entries in the consumer report for the same criminal offense), which led to denied employment, and failed to comply with the requirements under FCRA mandating that consumers be given access to their own information and the ability to dispute the information.

Under the stipulated final judgment and order, the consumer reporting agency must pay a $2.6 million penalty, is permanently enjoined from continuing the practices referenced in the complaint, and must submit to compliance monitoring.