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Derek Hinton's Column
October 01, 2012 posted by Steve Brownstein
Protecting Yourself
"Should an intruder attack you in your home, you are likely to be within your rights if you pick up an item such as a frying pan, umbrella or golf club to defend yourself. Likewise if the attacker is wielding a hefty blade it is probably OK to parry this with a kitchen knife, but a court is unlikely to be sympathetic if you use more force than a court decides is necessary to deter the burglar or intruder."
---The book "Extreme Survival"
I suspect that if you're like me, if someone breaks into your home they're going to be met with more than an umbrella and we'll figure out what they were wielding later. (My son was reading the book referenced above, found that passage, showed me and, it's a Great Britain import.)
I've thought about that passage several times while talking to employment screening firms recently. They would have gone to great length to protect themselves, their family and business if an intruder broke in to steal what they had built.
But when confronted with a somewhat more covert - but every bit (or more) as dangerous a threat to their business "I do say old chap, out comes the umbrella and the TAP" tappity-tap-tap on the noggin of the threat begins.
What external threats should concern you as a CRA and what is much better protection than a figurative umbrella? The protection answer is much more within your control: you should learn, adopt, document and internalize the practices detailed in the NAPBS Accreditation Standard. It is a CRA best practices handbook. The external threats are harder to predict, but there are three areas of concern.
Government Actions
The recent FTC penalty on HireRight for $2.6 million is the first time the FTC has charged an employment background screening firm with violating the FCRA. Is this a new threat? Not really, but it is a new focus by the agency which increases an existing threat. They've made a statement in one area of practice (primarily in criminal record reporting) but consumer identity theft protection, employer education and practices and use of credit reports are other areas of practice of interest to them.
There's also a new wannabe co-sheriff in town, the Consumer Financial Protection Bureau (CFPB). How much power and authority they will have over whom may not be exactly clear, but when an agency is making a list of companies, there's oftentimes a purpose. http://files.consumerfinance.gov/f/201207_cfpb_list_consumer-reporting-agencies.pdf. And if your agency is not listed, I would certainly not presume that it will not later be added.
Plaintiff Attorney Fishing Expeditions and State Government Agencies
You may believe that because you are not one of the big boys the FTC will not target you, or you are not on the new Consumer Financial Protection Bureau's radar so there is not much to worry about.
I can assure you, with first-hand knowledge, that there are other external threats that would like to have some or all of the money your agency may earn. At present, there is an attorney who is making a nice living by finding CRAs who make even no-harm technical violations of some manner and then shake them down for $20K to go away. This attorney does not discriminate against the smaller agency. Oftentimes, the CRA will be charged with a claim that is defensible--but a review of the CRA's forms and processes show non-compliance with another law and thus the CRA cannot defend the defensible claim because of the other issues that will come out on discovery.
There are also some state and even local government agencies that are stepping up to sue CRAs.
This is not a new threat, there have been plaintiff attorneys and state government agency actions since the little known and poorly recorded aftermath of Moses parting the Red Sea and the resulting destruction of wetland habitat imbroglio.
What is new, is the focus and specialization of looking for CRAs and plaintiffs as a specialty. The good news is that you can greatly inoculate your firm from these threats by adopting, living and documenting the NAPBS Accreditation Standard.
Competitors will be accredited
Another outside threat is that many more companies are becoming accredited and it will soon be a standard that employers look for when deciding whom to use for their screening. Most of you have seen it on RFP questions already. It will become the norm, but prior to that it will (and is) being used as a competitive advantage by accredited firms.
The bad news is that whether it be government action, plaintiff attorney, competition, disgruntled consumer or even an uneducated employee or client, you don't know from where the next threat will come.
The good news is that there's an effective protection strategy common to much of these threats'NAPBS Accreditation.
