HireRight Solutions Ordered to Pay 2nd-Largest Penalty in FTC History for Violating Fair Credit Reporting Act

HireRight Solutions lost their shirt in FRCA/FTC case.

The Federal Trade Commission (FTC), with the assistance of the United States Department of Justice (DOJ), prevailed in a civil suit against HireRight Solutions for violating provisions of the Fair Credit Reporting Act (FRCA). The United States District Court for the District of Columbia ordered HireRight Solutions to pay a $2.6 million penalty for providing clients (potential employers for job applicants) with outdated and erroneous information that could bar a job applicant from employment.

According to the FTC, HireRight failed to investigate disputed claims found in the consumer reports they provided regarding job applicants they screened for employers. There were instances of when HireRight supplied a consumer report to the job applicant’s potential employer that showed the applicant had a criminal record, but didn’t reveal it was expunged. In other instances, the same crime showed up on the consumer report numerous times.

Think of the angst the job applicant, who in good faith checked “No” next to the question: “In the past seven years have you been convicted of a felony?” only to find out they won’t be hired because he/she allegedly falsified the job application.

On top of that, HireRight Solutions did not provide written notification to consumers when they provided information to prospective employees, as required by the FCRA.

Surely a $2.6 million penalty sends a clear message to companies and businesses who are required to operate within the bounds of the Fair Credit Reporting Act. Naturally, providing consumers with accurate and up-to-date data in their personal consumer report without taking shortcuts or bypassing certain provisions of the act is the right thing to do. It’s just common sense.

In addition to paying $2.6 million, the court ordered HireRight to:

  • adhere to reasonable practices and procedures to ensure the accuracy of consumer reports;
  • provide a copy of a consumer’s report to the consumer;
  • comply with statutory requirements regarding consumer reporting agencies for using information that is public record;
  • investigate disputes brought by consumers and provide consumers with the results of the investigation; and
  • reinvestigate dispute claims as requested.

As a proprietor and business owner, you should be aware of what the Federal Trade Commission requires in order to protect consumers. That means potential applicants for employment also qualify as consumers under the FCRA for the purposes of conducting a background check.

Take the time to find out what the FTC requires and what pitfalls to avoid when hiring new employees. An experienced business attorney, who understands the stringent requirements and nuances of FTC regulations, is an attorney that can help make sure your business continues to move forward.

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