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Les Rosen Reports:Report on inaccurate criminal background checks may itself contain inaccuracies

May 01, 2012 posted by Steve Brownstein

A new report on background check companies from the National Consumer Law Center (NCLC) called "Broken Records: How Errors by Criminal Background Checking Companies Harm Workers and Businesses" claims mistakes on criminal background check reports conducted for employers cost job seekers employment and recommends solutions for improving the accuracy and accountability of background check providers.

However, a San Francisco-area based safe hiring expert finds the NCLC report "is itself fatally flawed with errors and inaccuracy" and has written an article, "Consumer Group Report on Inaccurate Criminal Background Check Reports Loses Impact Due to Lack of Objectivity and Errors," to address the "erroneous information and unfounded conclusions" contained in the report.

According to the Executive Summary in the report from the NCLC, a nonprofit advocacy organization seeking to build economic security for economically disadvantaged Americans:

Since 2007, the United States has experienced the worst unemployment rates since the Great Depression. Adding to this job crisis, criminal background checking companies are making it even more difficult for workers to obtain employment. Approximately ninety-three percent of employers conduct criminal background checks for some potential applicants, and seventy-three percent of employers conduct criminal background checks for all potential applicants. The widespread dissemination of criminal record histories limits employment opportunities for an estimated sixty-five million adults (nearly one in four adults) in the United States who have some sort of criminal record.

Although background check firms " also called Consumer Reporting Agencies (CRAs) " are required to "follow reasonable procedures to assure maximum possible accuracy of consumer information" under the federal Fair Credit Reporting Act (FCRA), the report describes several types of mistakes in criminal background check reports that affect a job seeker's ability to find employment that include:

• Mismatching the subject of the report with another person;
• Revealing sealed or expunged information;
• Omitting information about how the case was disposed or resolved;
• Containing misleading information; and
• Mischaracterizing the seriousness of the offense reported.

The NCLC report also claims that many of these background checks report errors can be attributed to "common"practices by background screening companies that include:

• Obtaining information through purchase of bulk records, but then failing to routinely update the database;
• Failing to verify information obtained through subcontractors and other faulty sources;
• Utilizing unsophisticated matching criteria; Failing to utilize all available information to prevent a false positive match; and
• Lack of understanding about state specific criminal justice procedures. 
  Based upon the issues identified in the report, the NCLC recommends the Consumer Financial Protection Bureau (CFPB) " the federal agency that holds primary responsibility for regulating consumer protection in the United States " and the Federal Trade Commission (FTC) use their rulemaking authority under the FCRA to require mandatory measures to ensure greater accuracy and investigate background screening companies for FCRA compliance violations regarding consumer reports for employment purposes. The NCLC also recommends U.S. states should help to ensure the accuracy of background screening companies.

In his article, Attorney Lester Rosen, founder and CEO of San Francisco-area based background check firm Employment Screening Resources (ESR) and author of "The Safe Hiring Manual," writes that while the NCLC report "suggests inaccurate criminal background checks are widespread," the report only "cites a handful of anecdotal stories and some court cases where an inaccurate background check had grave consequences on a consumer's ability to get a job out of the millions of background checks conducted yearly."

According to Rosen, statements in the report such as "professional background screening companies routinely make mistakes" and "criminal background checks often contain incorrect information or sealed information" are simply not supported by the few cases and anecdotes taken out of millions of reports prepared yearly. Consequently, "this report on errors and inaccurate information is itself fatally flawed with errors and inaccuracy."

Rosen's article cites several examples of erroneous information and unfounded conclusions in the NCLC report that include:

• The NCLC report insinuates that the problem of inaccurate reports is widespread by citing a few anecdotes. Yet in the entire report, only a handful of examples are given even though the background screening industry performs millions of background checks per year.
• The NCLC report fails to mention that consumer litigation provides a powerful tool for consumers who may be the victims of an inaccurate report.
• The NCLC report fails to note that a United States Supreme Court case decided in June 2007, Safeco Ins. Co. v. Burr, substantially increased the risk of punitive damages by ruling that a reckless disregard of the FCRA could be sufficient to show "willful" non-compliance, a decision that has led to a dramatic increase in class action litigation.
• The NCLC report omits, and completely fails to recognize, the great benefit that background screening reports provide society in reducing workplace violence, theft, and fraud, along with putting the best qualified candidate in each open position. The employer also has the legal obligation to exercise due diligence in hiring.
• The NCLC report fails to recognize or understand the service background screening firms perform in working with applicants to help correct inaccurate data. Since background check reports are often the first time an applicant discovers there is inaccurate information in the public sphere that needs correcting.
• The NCLC report does not differentiate between "data brokers" who dispense aggregated and unconfirmed data and Consumer Reporting Agencies (CRAs) that assemble and evaluate material from a number of sources to provide a background check report where all information reported has been confirmed at the source during its preparation.
• The NCLC report, in lumping CRAs together with data brokers, fails to note that a group of approximately 170 leading Consumer Reporting Agencies called "Concerned CRAs" has publically rejected the use of databases without taking the steps necessary to a ensure accuracy and completeness as required under the FCRA.

Rosen concludes that the real issue is that background checks occur at the intersection of two fundamental American values  security and giving people a second chance:

On the one hand, background checks can promote safety, security, and honesty while lessening the chance for workplace violence or the hiring of unqualified workers with fake credentials. On the other hand, employers using background checks should be concerned with issues of fairness and privacy while combating discrimination, as well as the need to give ex-offenders a second chance so that they can become law abiding tax paying citizens, which requires a job. Otherwise, as a society we will build more jails and prisons and less schools and hospitals.