The U.S. Federal Trade Commission has sent warning
letters to the makers of six mobile apps used for background checks, saying the
apps may violate the Fair Credit Reporting Act (FCRA), intended to protect the
privacy and accuracy of consumer report information.
Part of the FCRA requires companies to take reasonable
steps to ensure the accuracy of the information they sell and to tell employers
using their services about their obligations to applicants. It seems that the FTC has reason to believe
that customers using these apps may not be complying with the FCRA. As a first step, these warning letters are
asking these companies to review their apps and policies to ensure compliance.
Do these companies and their apps qualify as consumer
reporting agencies? As sensitive
information that can be used for employment screening, housing, and credit,
becomes more readily available the FTC will be taking a closer look at these
companies to make sure they are taking the necessary steps to provide accurate
information and provide its users information regarding their obligations.
I expect the screening industry will be paying close
attention to this case to see what the company’s response will be and what the
FTC will do next.