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For Release: 08/08/2012

Employment Background Screening Company to Pay $2.6 Million Penalty = for=20 Multiple Violations of the Fair Credit Reporting Act

FTC Charges HireRight Solutions Incorrectly Listed Criminal = Convictions on=20 Reports of Some Consumers

An employment background screening company that provides consumer = reports to=20 companies nationwide will pay $2.6 million to settle Federal Trade = Commission=20 charges that it v= iolated=20 the Fair Credit Reporting Act by failing to use reasonable procedures to = assure=20 the maximum possible accuracy of information it provided, failing to = give=20 consumers copies of their reports, and failing to reinvestigate consumer = disputes, as required by law.

The case against HireRight Solutions, Inc. represents the first time = the FTC=20 has charged an employment background screening firm with violating the = FCRA, and=20 is the second-largest civil penalty that the FTC has obtained under the = Act.=20 Only the 2006 $10=20 million civil penalty against consumer data broker ChoicePoint, Inc. = was=20 larger. The Department of Justice filed the complaint and proposed order = against=20 HireRight Solutions on the FTC's behalf. Under the settlement, the = company also=20 is barred from continuing its alleged illegal practices.

In its capacity as a consumer reporting agency, HireRight Solutions, = provides=20 background reports that contain information about prospective and = current=20 employees to help thousands of employers make decisions about hiring and = other=20 employment-related issues. Under the FCRA, the company's reports qualify = as=20 "consumer reports." They contain public-record information, including = the=20 individuals' criminal history.

The FTC alleges that in many cases, when it provided consumer reports = to=20 employers, HireRight Solutions failed to take reasonable steps to ensure = that=20 the information in the reports was current and reflected updates, such = as the=20 expungement of criminal records. Because of this, the FTC charged, = employers=20 sometimes received information that incorrectly listed criminal = convictions on=20 individuals' records.

In addition, a= ccording=20 to the FTC's complaint, HireRight Solutions failed to follow reasonable=20 procedures to prevent the same criminal offense information from = being=20 included in a consumer report multiple times, failed to follow = reasonable=20 procedures to prevent obviously inaccurate consumer report information = from=20 being provided to employers, and in numerous cases even included the = records of=20 the wrong person. The FTC alleged that these failures led to consumers = being=20 denied employment or other employment-related benefits.

Under the FCRA, consumer reporting agencies must allow consumers to = access=20 their own information and dispute any inaccuracies. To do this, the = consumer=20 reporting agency must clearly and adequately disclose information in = their file=20 to a consumer who requests it. Next, within 30 days of being notified = that a=20 consumer wants to dispute the information in his or her report, the = consumer=20 reporting agency must conduct a reasonable investigation to determine = whether=20 the information is inaccurate, record the status of the information, or = delete=20 it from the file. Finally, the consumer reporting agency must notify = consumers=20 in writing of the results of this reinvestigation of their file within = five days=20 of when it's completed.

In numerous instances, HireRight Solutions failed to comply with = these FCRA = requirements, the FTC alleges. This includes failing to conduct=20 investigations of disputed items in a consumer's file after being = notified of a=20 dispute, requiring consumers who wanted to dispute information in their = file to=20 have a copy of the report before the company would start a = reinvestigation, and=20 telling consumers who did not have a copy of their report to request one = before=20 they would reinvestigate, delaying the dispute process and making it = more=20 difficult. In addition, according to the FTC, HireRight Solutions closed = complaint investigations without providing written notice of the results = to=20 consumers, as required.

Finally, the complaint alleges that HireRight Solutions failed to = provide=20 consumers with written notification that it had reported public record=20 information about them to employers when it was being reported, as the = FCRA=20 requires.

In addition to the $2.6 million civil penalty, the settlement = prohibits=20 HireRight Solutions from:

failing to maintain reasonable procedures to ensure that its = consumer=20 report information is as accurate as possible;=20
failing to provide consumers with information in their files in a = timely=20 manner;=20
requiring consumers to obtain a copy of their report before the = company=20 will conduct a dispute reinvestigation;=20
failing to provide consumers with the results of a dispute=20 reinvestigation; and=20
failing to comply with the requirements for consumer reporting = agencies=20 that use public record information.

Consumer Education

The FTC has a variety of resources available for consumers seeking=20 information about employment background checks. They included a business = blog=20 post, "= Where=20 HireRight Solutions Went Wrong," the consumer education = publications, "What= to Know=20 When You Look for a Job." and "Emplo= yment=20 Background Checks and Credit Reports,"and a new video, "What to Know When = Looking=20 for a Job."

The Commission vote to authorize the staff to refer the complaint to = the=20 Department of Justice, and to approve the proposed consent decree, was = 5-0. The=20 DOJ filed the complaint and proposed consent decree on behalf of the = Commission=20 in U.S. District Court for the District of Columbia on August 8, 2012. = The=20 proposed consent decree is subject to court approval.

NOTE: The Commission authorizes the filing of a = complaint=20 when it has "reason to believe" that the law has been or is being = violated, and=20 it appears to the Commission that a proceeding is in the public = interest. The=20 complaint is not a finding or ruling that the defendant has actually = violated=20 the law. This consent judgment is for settlement purposes only and does = not=20 constitute an admission by the defendant of a law violation. Consent = judgments=20 have the force of law when signed by the District Court judge.

The Federal Trade Commission works for consumers to prevent = fraudulent,=20 deceptive, and unfair business practices and to provide information to = help=20 spot, stop, and avoid them. To file a complaint in English or Spanish, = visit the=20 FTC's online Complaint=20 Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters = complaints=20 into Consumer Sentinel, a secure, online database available to more than = 2,000=20 civil and criminal law enforcement agencies in the U.S. and abroad. The = FTC=92s=20 website provides free = information on a=20 variety of consumer topics. Like the FTC on Facebook, = follow us=20 on Twitter, and = subscribe to press = releases=20 for the latest FTC news and resources.

MEDIA CONTACT:=20: Mitchell J. Katz
Office of Public = Affairs
202-326-2161=20
=20
STAFF CONTACT:=20: Anthony Rodriguez
Bureau of Consumer=20 Protection
202-326-3-2757=20; Tiffany George
Bureau of Consumer=20 Protection
202-326-3040

(FTC File No. 102-3130)=20
(HireRight.final)

Vea=20 este comunicado de prensa en espa=F1ol.

Related Items:

United= States=20 of America (For the Federal Trade Commission), Plaintiff, v. HireRight=20 Solutions, Inc., Defendant
(United States District Court = for the=20 District of Columbia)
Case No. 1:12-cv-01313
FTC File No. = 102 313=20

What to Know When Looking for a = Job

View = larger,=20 download, or embed video

3Dspacer=20

For Consumers:

Emplo= yment=20 Background Checks and Credit Reports=20
Credit= =20 Reports & Scoring=20
What= =20 to Know When You Look for a Job=20
What to = Know When=20 Looking for a Job (video)

For Businesses:

Using=20 Consumer Reports: What Employers Need to Know=20
Disposing=20 of Consumer Report Information? New Rule Tells How=20
Where=20 HireRight Solutions Went Wrong=20

Our Mission: to Prevent Business Practices that = Are=20 Anticompetitive, Deceptive, or Unfair to Consumers

Last Modified: Wednesday, August = 8, 2012=20