“Too often background check companies rely solely on computers to match the data with no one checking to make sure the results are correct.”
Sadly, this statement is true.

On Friday, November 9, 2012, NBC’s Today Show aired a report by investigative reporter Jeff Rossen about accuracy problems with some employment background checks. This is the latest indictment of the employment background screening industry’s accuracy by the media, consumer protection groups, the EEOC, and the courts.

The report painted the background screening industry with a broad brush and failed to recognize efforts by some in the industry to raise awareness of consumer protection best practices. Unfortunately, rather than being angered by the fact that a few large database companies are causing almost all of the problems in our industry, many in the industry have chosen to blame the messenger.

The Today Show segment focused on three anecdotes of individuals whose employment opportunities were damaged when employment background checks wrongly associated others’ criminal histories with them. According to the report:

  • Choicepoint, now owned by Lexis-Nexis, reported a “long rap sheet of drug felonies” in the background check for Catherine Taylor, an accountant. The offenses belonged to another Catherine Taylor with the same date of birth who lived in another state.
  • Sterling Info Systems reported to an employer that Leonard Smith was a sex offender, confusing him with another Leonard Smith who was incarcerated at the time of the report.
  • ADP reported that James Hines associated the sex offender Michael James Hines in a report to an employer.

The news report went on to claim that “too often background check companies rely solely on computers to match the data with no one checking to make sure the results are correct.”

Sadly, this statement is true.

How Bad Background Checks Happen

Many large database-driven background screening companies sell instant background checks based on giant databases of data retrieved from counties and state agencies across the country. Often these records have only offenders’ names while others include full or partial dates of birth.

The instant background check companies buy this data or scrape it from public websites and shoehorn the information into a big database and make it available to employers very inexpensively, often touting it as an instant “national” or “nationwide” background check.

In many cases, no human reviews the information before it is transmitted to the employer, who, believing that surely they can trust the reliability of the information coming from the nationally-known background screening firm, makes an adverse hiring decision based on the information. The result is that the individual loses an employment opportunity and the employer misses out on a qualified candidate.

This risk is the reason that good employment background screening companies will not provide criminal records from databases without first verifying the records against the original records source. During that verifications process, they try to obtain additional identifying information to connect the record to the job applicant. This often involves going beyond the court’s publicly-available computer records and scouring the court’s paper files for dates of birth, addresses, and, more rarely, driver’s licenses or social security numbers. This process is time consuming and much more expensive than simply providing incomplete information to employers.

The database companies often point out that the federal Fair Credit Reporting Act gives consumers (job seekers or employees) the right to dispute any incorrect information. They never seem to point out that the same law requires:

Whenever a consumer reporting agency [the FCRA’s term for background screening companies] prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.

Not All Background Screening Companies are this Sloppy

The Today Show report had one big flaw however: It failed to recognize that although the big database companies dominate the background screening market with giant advertising budgets and rock-bottom prices, many professional background screening firms follow the best practice of verifying the records as up-to-date and accurate before reporting them to the employer. In fact, over 160 screening firms have come together under the banner of Concerned CRAs to promote this consumer protection best practice.

I contacted the Today Show reporter with information about Concerned CRAs’ advocacy of best practices in this area more than two weeks before the segment aired but never heard back from him. The story was, I suppose, more sensational, if less complete, without that information. However, I choose to be angry at the poor consumer protection practices that created these and other anecdotes used against the background screening industry.

How to Fix the Problem Without Throwing the Baby Out With the Bathwater

Criminal background checks are obviously important in ensuring public safety and safe workplaces. Employers need to know who they are hiring and fairly evaluate the risks associated with putting someone in a certain job. BadHireDays.com and The Sue Weaver C.A.U.S.E. website detail a number of instances where the wrong person was placed in the wrong position.

However, without compromising employer’s access to reliable information, there is a simple fix available to the problem of inaccurate database-driven background checks.

By removing one small paragraph from the FCRA, database companies’ business models would be forced to change overnight:

§ 613. Public record information for employment purposes [15 U.S.C. § 1681k]

(a) In general. A consumer reporting agency which furnishes a consumer report for employment purposes and which for that purpose compiles and reports items of information on consumers which are matters of public record and are likely to have an adverse effect upon a consumer’s ability to obtain employment shall

(1) at the time such public record information is reported to the user of such consumer report, notify the consumer of the fact that public record information is being reported by the consumer reporting agency, together with the name and address of the person to whom such information is being reported; or

(2) maintain strict procedures designed to insure that whenever public record information which is likely to have an adverse effect on a consumer’s ability to obtain employment is reported it is complete and up to date. For purposes of this paragraph, items of public record relating to arrests, indictments, convictions, suits, tax liens, and outstanding judgments shall be considered up to date if the current public record status of the item at the time of the report is reported.

Section 613(a)(1) is the paragraph that the database companies hang their hats on to defend their practice. Removing it removes their most common defense.

Why Doesn’t the Background Screening Industry Advocate for this Fix (Or Any Fix)?

The main trade association representing background screening firms, the National Association of Professional Background Screeners (NAPBS) has its hands tied. Because they have to represent the entirety of their membership, which includes the big database companies, NAPBS says that it cannot advocate for a legislative fix to this problem.

Since its founding, this problem has been point of consternation within NAPBS. In the halls (and bars) at NAPBS conferences, many of us have debated this issue bitterly. (Disclosure: I am a current member and past board member of NAPBS. I currently serve on an NAPBS committee, as well.)

In his response to the Today Show segment, the NAPBS Chairman pointed out that NAPBS has “a company based accreditation program with more than 58 specific standards of compliance to ensure our members provide the highest level of performance.” That is true. (In fact, I was a co-chair of the committee that wrote the accreditation program’s standards.)

However, it is also true that the accreditation committee recommended that, in order for a company to achieve accreditation, all records should be verified as accurate and up-to-date before being reported to the employer. This clause was overruled by the NAPBS Board of Directors, whose Chairman at the time worked for a company that sold unverified database records to employers.

As seen painfully in the Today Show report and NAPBS’ subsequent press release, the association’s representatives are reduced to avoiding the root cause of this problem.

There are many in the background screening industry, including some of those who refuse to sell unverified database records to employers, who believe that we must defend the entire industry for fear of the unintended effects of legislation.

However, when all of the anecdotes being used against our industry seem to come from the irresponsible use of criminal records databases, I believe that responsible companies must advocate for accuracy and consumer protection and make themselves available to legislators and regulators. Otherwise, the background screening industry will continue to stick our collective heads in the sand and ultimately suffer the negative effects of reactionary, ill-conceived legislative fixes to the problem. With the growing awareness of the problems in our industry, new legislation or regulation is coming one way or the other – shouldn’t we be engaged in trying to ensure that the causes of the problem and the appropriate responses are understood?

This is the reason that Concerned CRAs was founded several years ago. Over 160 background screening firms participating in Concerned CRAs have certified that they never report database criminal records directly to employers without first verifying the accuracy of the information. By coming together under the Concerned CRAs banner, those firms are drawing attention to their adoption of best practices in consumer protection.

[hr]Mike Coffey, SPHR is president and founder of Imperative Information Group. Any opinions are his own and not those of any association to which he belongs or its members.