General Information Services (GIS) and e-Background-checks.com Inc. (e-Background) agreed to pay $13 million in restitution and fines to settle their violations of the Fair Credit Reporting Act (FCRA) charged by the Consumer Financial Protection Bureau (CFPB). The CFPB charged GIS and e-Background with failure to ensure that the background checks they produced to potential employers had accurate information about the job applicants. GIS and e-Background will pay $10.5 million (or $1,000 per affected job applicant) and will also pay $2.5 million in civil penalties. CFPB Director Richard Corday said, “[GIS and e-Background] failed to take basic steps to provide accurate background screening reports to employers about job applicants [. . .] we are holding two of the largest companies in this market accountable for cleaning up the quality of their reports.”
The erroneous background checks were conducted between July 2011 and December 2014, and affected over 11,000 people. There was no written policy regarding research of people with common names, no middle name requirement, and no audit processes in place to ensure accuracy of reports. Many reports contained inaccurate criminal records, crimes that had actually been expunged or dismissed and misdemeanors reported as felonies. In addition to these fines, policies and processes will be updated (and implemented) and an independent consultant will review all policies and procedures to ensure appropriate measures are in place.