Background Checks: There's An App For That


[author: Lawrence McGoldrick]

But Are You Using It Correctly?

In January of this year, the Federal Trade Commission (FTC) issued a warning to three companies that sell mobile applications (apps) which provide background reports, including criminal record reports. The issues are whether those apps and reports are covered by the Fair Credit Reporting Act (FCRA), and whether the providers and their customers – that would be you – are complying with the FCRA's requirements.

The FTC letters were addressed to three providers of mobile apps (Everify, Inc., InfoPay, Inc., and Intelligator, Inc.). The apps include the Police Records app, the Criminal Pages app, and others.

Although the FTC said in the January letters that it had not determined whether any violation of the FCRA had occurred "at this time," the agency encouraged the providers to "review your mobile applications and your policies and procedures for compliance with the FCRA," and that those applications "may be in violation of the FCRA."

The Basics

The FCRA imposes various duties on consumer reporting agencies, entities that sell background reports for certain purposes (including employment purposes or other statutory purposes). Among other duties, the FCRA requires that such agencies take reasonable steps to ensure the maximum possible accuracy of the information in such reports (which are known as consumer reports).

The FCRA also imposes several requirements on employers who use consumer reports. Those employer requirements include a disclosure-and-authorization requirement, a pre-adverse-action notice requirement, and a post-adverse-action notice requirement. The statute provides financial penalties for violations. These requirements don't apply to those employers who do their own background checks directly, but they do apply when you use a third party – a consumer reporting agency – to compile the information.

In the letters to the providers of such apps, the FTC wrote:

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. This is true even if you have a disclaimer on your website indicating that your reports should not be used for employment or other FCRA purposes. We would evaluate many factors to determine if you had a reason to believe that a product is used for employment or other FCRA purposes, such as advertising placement and customer lists.

The Bottom Line

Exercise caution to ensure that any reports or other information used by you or your managers in making employment decisions are properly obtained and properly used in accordance with any applicable federal or state laws, including both the FCRA and any applicable equal employment opportunity laws.

For more information contact the author at or (404) 231-1400.

Written by:

Published In:

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Fisher & Phillips LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.