Mobile App Disclaimers Not Sufficient to Circumvent FCRA Requirements


The Federal Trade Commission reached a settlement last week with a mobile app company, its data provider, and their CEO in its first Fair Credit Reporting Act (“FCRA”) enforcement action involving mobile applications. The mobile application company designed mobile apps that enabled users to search criminal records databases and advertised the apps as tools for conducting criminal background checks on potential employees.

Under the FCRA, individuals or organizations that use outside entities, including apps, to procure certain background information on employees or applicants in connection with their employment (or potential employment) must comply with certain notice, authorization, and other rules. Although the companies included disclaimers in their terms and conditions stating that they were not FCRA compliant, that their products were not to be considered screening products for employment, insurance, loans, and credit screening, and that anyone who used their reports for such purposes assumed sole responsibility for FCRA compliance, the Commission viewed these disclaimers as insufficient to avoid liability under the FCRA because the mobile app company advertised that the reports could be used to conduct searches on potential employees, and therefore, the companies could expect them to be used for employment purposes.

Please see full alert below for more information.

LOADING PDF: If there are any problems, click here to download the file.

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.

© Cohen & Gresser LLP | Attorney Advertising

Written by:


Cohen & Gresser LLP on:

JD Supra Readers' Choice 2016 Awards
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*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. Or, sign up using your email address.