Inaccurate Credit Reports – $13 Million in Fines
Inaccurate credit reports is commonplace for many employers to pull background checks on job applicants to view things like credit history, criminal history and other factors that can better help them to determine potential risk during the hiring process. Employers who don’t pull background checks based on company policy might even do so with the candidate’s permission.
But what happens when the background check firms report faulty information to employers? That’s been the case recently, as General Information Services and Backgroundchecks.com, two of the biggest background check firms in the country, were ordered to pay a $10.5 million fine to consumers for selling inaccurate credit reports. The fine was ordered by the Consumer Financial Protection Bureau (CFPB), which also ordered the two background check firms to pay an additional $2.5 million civil penalty for failure to verify the accuracy of the reports that were sold. The two companies sell about 10 million background reports each year to employers. And many of the inaccuracies on the reports that they are now being held accountable for weren’t exactly minor errors – they were major ones. Things like including judgments that were older than seven years, misdemeanor crimes being reported as felonies and criminal record mix ups between consumers with similar names were just a few of the issues that were reported. Affected consumers are believed to be receiving about $1,000 each from the issues fines. It’s a bad look for the background check companies – and it brings about the question of just whether background checks for employment purposes are really worth it or not. That’s because the biggest loser in this entire background check debacle is the millions of people that were likely passed up for a job.