When Background Checks Go Wrong
by Steven Melendez
After spending several years on a waiting list for a subsidized apartment in Tennessee, “Jack” says he was turned away by a leasing agent when incorrect information turned up in a routine background check.
“She’s like, ‘You have a sex offender charge on your record,’ and I was shocked,” says Jack, who requested that we not use his real name to avoid having it further associated with the erroneous allegation. “I never have been charged with that.”
The agent showed Jack a copy of the report, which referred to a man with a similar name and birthdate, he says. The report also included a photo of the alleged sex offender, who the leasing agent acknowledged clearly wasn’t him. (Among other things, the man pictured had conspicuous face tattoos.)
But Jack still lost his spot on the waitlist—he’s currently staying with a relative—and had a separate housing application also declined because of the mistaken information. As he tries to correct the record and clear up the confusion, every day is a new day of limbo.
Vidhi Joshi, an attorney at the Legal Aid Society of Middle Tennessee and the Cumberlands who is representing Jack, filed a formal dispute with the screening company that included the alleged offender’s picture but hasn’t yet received a response. She has also requested a copy of the report used for the second rental application, which was issued by a different background check firm, she says. (Joshi declined to identify the firms involved, since their responses are still pending).
Jack’s story is just one of what fair credit advocates say is a growing number of cases where incorrect information on criminal and other background checks is making it difficult for innocent people to find work and housing. Such checks are routinely required for employment and rental applications, and conducted with varying levels of diligence by hundreds of companies around the country, but they only work properly when the information they contain is accurate.
And, increasingly, that’s not the case.
“We have gone from back in the early part of the century seeing a couple hundred [cases] about criminal records a year up to more than a thousand a year,” says Sharon Dietrich, litigation director at Community Legal Services of Philadelphia and head of the legal aid group’s employment unit.
Digitizing data like court records has made background checks significantly cheaper and faster than in years gone by: In 2012, a Society for Human Resource Management survey found that more than two-thirds of organizations polled conducted criminal background checks on job candidates.
“I think employers are scared not to do it because they feel like they may be found liable for negligent hiring,” says Dietrich.
But regulation has not necessarily kept pace. Even some jurisdictions that have passed so-called “ban the box” legislation, which forbids employers from requiring potential hires to indicate on job applications whether they’ve been convicted of a crime, still allow criminal history checks later in the application process.
Companies typically use a third-party background screening service to verify the work and education histories of potential hires, and often to check a candidate’s credit history and search for any criminal convictions that might serve as a red flag, says Mike Aitken, vice president of government affairs at SHRM.
According to a May report from business intelligence firm IBISWorld, the $2 billion background check industry is mostly composed of small, local firms, which have benefited from easy internet access to more and more public records. Fear of liability for employee misconduct and post-9/11 security concerns have also contributed to rapid growth in the industry in recent years, according to the National Association of Professional Background Screeners, an industry group which counts more than 850 background screening companies as members.
And while the majority of checks are likely accurate, Dietrich says she’s seen a “good number” of cases where background reports include information about people with similar names to her clients. In one case, she says, a client with a common name received a report with 65 pages of criminal history data about unrelated people with similar names.
“I have even seen cases where a female’s record is attributed to a male or vice versa, simply because they don’t use gender information, even though they have it,” she says.
Even job applicants who do have criminal histories can still be unfairly harmed by slipshod background checks. Often, convictions legally expunged by a court still show up on reports. Crimes can also be misclassified, such as when misdemeanors are erroneously labeled as felonies, Dietrich says.
One problem is over-reliance on commercial databases, which can contain incomplete information or return hits based on false matches, says Larry Lambeth, the president of screening firm Employment Screening Services.
Lambeth is also the founder of Concerned CRAs, an association of consumer reporting agencies, as screening companies are known under federal law, voluntarily adhering to certain ethical standards. The group requires its members to consult original documents, like court records, and compare information like birthdates and addresses to verify data from databases actually corresponds to the subject of a background check.
“If you use a database for his criminal records, if you find a hit, we require that you pull a criminal record from the courthouse and find the identifiers and ensure it’s the right person,” he says.
But not all background screeners conduct such rigorous research, and not all clients are willing to pay for it, he says. And even well-intentioned screeners can have difficulty verifying records in jurisdictions where privacy-minded courts redact personal information like addresses and dates of birth, says Melissa Sorenson, executive director of the National Association of Professional Background Screeners.
“It’s extending the time frame of getting people to work,” she says, since it takes screeners longer to complete reports for employers. The organization generally tries to work with state and local regulators to make sure background screeners have access to the data they need to do their jobs, she says.
Under the federal Fair Credit Reporting Act, applicants do have the legal right to receive copies of their background checks and to contest any inaccuracies with the agencies that did the screening. But in practice, critics say the process can be arduous even for experts, let alone for individuals looking to correct their own records. Dietrich says she’s had a screening firm resist providing her with an address to send mail on behalf of a client.
“You have to know even where to look—look for a little link at the bottom [of a firm’s website] that says ‘consumers,’ and maybe that’s where you’ll find the dispute procedures,” says Dietrich. And those procedures often require documentation like proof of address that not everyone can easily provide, she says.
“Some people can do that, some people can’t, especially my clients who tend to be low-income and on the move,” she says.
Even in cases where data is obtained directly from government sources, it can still be incorrect or out of date: Former U.S. Attorney General Eric Holder, now a partner at law firm Covington & Burling, wrote letters on behalf of Uber to local legislators earlier this year, urging them not to require ride-hailing services to vet their drivers against the Federal Bureau of Investigation’s fingerprint database.
Critics have long said that the FBI database, which many states use to vet childcare workers, health care professionals, and others in regulated occupations, often contains wrong, misleading, or incomplete data. The database contains arrest records from law enforcement agencies around the country but only includes final case outcome data roughly half the time, according to a 2013 report from the National Employment Law Project. That means that arrests that resulted in an acquittal, dropped charges, or even expunged records can essentially appear as unresolved.
And updating outdated or simply incorrect data in the FBI’s files can be laborious and can leave jobseekers out of work while they reach out to multiple agencies to get the information fixed, says Maurice Emsellem, director of the NELP’s Access and Opportunity Program.
“Basically, you have to go back to the state that created the record to get it fixed,” he says. “The FBI won’t fix it in the FBI system.”
And while reforms to the FBI background check system have been proposed as part of bipartisan criminal justice reform legislation, they’ve yet to make it through Congress.
Nor, says Dietrich, have regulators addressed issues that have arisen around private background checks in the more than 45 years since the Fair Credit Reporting Act became law, such as how background screeners should handle record matching issues in computerized databases or how they should deal with potentially expunged cases.
“The world of regulation of these companies is not what it might be,” she says.
Meanwhile, the promise of future regulation is cold comfort for home-seekers like Jack, whose lives are being immediately damaged by bad data in a data-obsessed world. “He has suffered from homelessness,” Joshi says. “It’s had a pretty big impact.”