Errors on criminal background checks continue to keep consumers from getting jobs, housing, report shows

Passing a criminal background check is usually required to get a job or housing, however, employers and landlords are making decisions based on inaccurate reports. 

A report, “Broken Records Redux: How Errors by Criminal Background Check Companies Continue to Harm Consumers Seeking Jobs and Housing,” from the National Consumer Law Center, finds that problems with accuracy in criminal background check reports are still wide spread.

“Unfortunately, many background screening companies still seem to prioritize profit over accuracy, leading to reports that cost consumers’ jobs and housing,” said Ariel Nelson, center staff attorney and author of the report.

The center’s research shows that background screening companies continue to generate criminal background check reports that:

• Mismatch the subject of the report with another person, for example, listing criminal records belonging to someone else, often harming common-name consumers.
• Include sealed or expunged records, for example, listing a conviction that was legally removed from the public record.
• Omit information about how the case was resolved, for example, failing to report that charges were dismissed.
• Contain misleading information, for example, listing a single charge many times.
• Misclassify the offense reported, for example, reporting a misdemeanor as a felony.

The background screening industry is a multi-billion dollar industry, with about 94 percent of employers and about 90 percent of landlords using criminal background check reports. However, there aren't any registration requirements for background checking companies or standards for background checks.

Another recent problem: Many screening products are designed to automate and outsource decision making to the landlord or employer. This means that users can't individually assess or make judgment calls about applicants. Automated decision making may also hide errors and deny consumers the chance to explain why a record is inaccurate or why it shouldn’t bar housing or employment. Also, there’s no common standard for predicting if an individual will be a “good” tenant or employee. As a result, applicants who could have been accepted are excluded.

“Background screening companies often promote their products by pointing to the advanced technologies and automated processes they use, but the automation of criminal background check reporting has come with its own serious problems,” said Nelson.

Companies use automation to generate reports by running computer searches through giant databases of aggregated criminal record data. Reports may only undergo minimal, if any, manual review. As a result, they often lack key personal identifiers, information about how a case was resolved, and may not be updated frequently.

“If Congress, federal agencies, and states don’t act to ensure that background screening companies are closely monitored and hold them accountable for their repeated mistakes due to poor policies and practices, consumers will continue to pay the price by forfeiting housing and job opportunities while employers and landlords will miss out on qualified employees and tenants,” said Nelson.

Since the center’s report in 2012, the Consumer Financial Protection Bureau and the Federal Trade Commission have brought a handful of enforcement actions against several background screening companies for violations of the Fair Credit Reporting Act, but much more must be done, he said.

The center’s report recommends that Congress, federal regulatory agencies, and states use their authority to clean up the criminal background screening industry, including the following steps:

• Congress should amend the FCRA to increase protections for prospective tenants and give the FTC specific supervisory authority over background screening companies.
• The CFPB should use its rulemaking authority to require mandatory measures to ensure greater accuracy of background check reports and require registration of background screening companies.
• The CFPB and the FTC should continue to use their enforcement powers to investigate major background screening companies for FCRA violations. These federal agencies should also investigate nationwide employers for compliance with FCRA requirements for users of consumer reports for employment purposes.
• States should pass legislation requiring users of background check reports to review the underlying report produced by the background screener before making employment or housing decisions. States should require companies that receive bulk data from public records sources to delete sealed and expunged records and to routinely update their records. States should revoke the ability to receive data if an audit reveals that the company isn't in compliance.