$8.5 million sought to settle allegations of fair credit reporting violations by job screening firm

A firm that prepares background screening reports on job applicants will be required to pay $6 million in monetary relief to affected consumers – and a $2.5 million civil money penalty – to resolve allegations that it violated fair credit reporting requirements, the federal consumer financial protection agency said Friday.

The firm, Sterling Infosystems (based in New York), will also face injunctive relief to prevent its alleged illegal conduct from recurring, the Consumer Financial Protection Bureau (CFPB).

In a release, the agency said it had filed a proposed stipulated judgment with the firm. The bureau said it claims that Sterling violated the Fair Credit Reporting Act (FCRA) by failing to employ reasonable procedures to ensure the maximum possible accuracy of the information it included in the consumer reports it prepared.

Specifically, CFPB said, it alleges that Sterling’s procedures created a heightened risk that its consumer reports would include criminal records belonging to another individual with the same name as the applicant. The agency also alleges that Sterling had a practice of including “high-risk indicators” in its reports without taking any steps to verify the accuracy of them. The indicators, which Sterling obtained from a third party, characterized addresses that the consumer may have lived at as “high risk,” CFPB said.

The consumer agency also claims that Sterling violated FCRA by failing to maintain strict procedures to ensure that public record information that it included in the consumer reports was complete and up to date or notify consumers, at the time that such information was reported, of the fact that public record information was being reported.

CFPB also claims that Sterling violated FCRA by reporting criminal history information and other adverse information about consumers outside of the allowable reporting period, the agency said.

Consumer Financial Protection Bureau Settles with Employment Background Screening Company

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