FCC warns background check mobile apps may be illegal

Employment checks in North Carolina faced a potential hurdle this week as the Federal Trade Commission said it sent letters to six unidentified mobile applications makers warning them that their background screening apps may be violating federal statutes. Specifically the FTC said if the app makers have reason to believe their background reporting apps are being used for employment screening, housing, credit, or other similar purposes, they must comply with the Fair Credit Reporting Act which is supposed to protect consumer privacy and ensure that the information supplied by consumer reporting agencies is accurate. Fair Credit Reporting Act Under the FCRA, operations that assemble or evaluate information to provide to third parties qualify as consumer reporting agencies, or CRAs. Mobile apps that supply such information may qualify as CRAs under the Act, according to Network World. CRAs must take reasonable steps to ensure the user of each report has a ‘permissible purpose’ to use the report; take reasonable steps to ensure the maximum possible accuracy of the information conveyed in its reports; and provide users of its reports with information about their FCRA obligations. For example, in the case of consumer reports provided for employment purposes, CRAs must provide employers with information regarding their obligation to provide notice to employees and applicants of any adverse action taken on the basis of a consumer report. According to the letters, the FTC has made no determination whether the companies are violating the FCRA, but encourages them to review their apps and their policies and procedures to be sure they comply with the FCRA. Future actions against those firms weren’t ruled out if violations are found. Conclusions? While there is no doubt that the background check process will transfer into the mobile world at some point in the future, only time will tell how the process can be completed in a legitimate way.]]>