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Job Seekers Can Correct Inaccuracies in Credit Reports

Trying to protect your business by screening job applicants can be a balancing act , one that comes with a strict set of rules.

The federal Fair Credit Reporting Act sets a number of regulations for consumer reporting agencies. Among them:

– Applicants must give written consent for background reports to be provided to employers, and they must be told if information in their files has been used against them.

– They have the right to know what is in their file, to ask for a credit score, and to dispute incomplete or inaccurate information.

– Consumer reporting agencies must correct or delete erroneous information, and may not report outdated negative information.

Keeping up with state and federal requirements regarding screening can be especially onerous for smaller businesses. For instance, the authorization forms need to provide a box that the applicant can check to request a copy of the background report.

“I find that a number of companies unknowingly are not using the forms that comply with the law,” said Rick Bergstrom, co-chairman of Morrison & Foerster LLP’s employment group in San Diego. “They may not have a box you can check. Or they don’t have the names, addresses and telephone numbers of the consumer reporting agency, which is supposed to be on the form. In that case, the authorization is not valid, and the employer has potential exposure for violation of state or federal law.”


Consumer Control

While traditionally the company initiates background checks, a service called My & #173;Back & #173;groundCheck.com allows the applicant to start the process. This allows applicants to nip any problems in the bud , and challenge erroneous information , before it gets to an employer, said Robert Mather, chief executive officer of the Redding-based Pre.employ.com, MyBackgroundCheck.com and Past-Employ.com.

“They have complete control,” he said. “The site allows applicants to put together the package they want to release, and they can verify the information before they give it out to the business owner. The benefit for business owners is, it’s free. If they wish to reimburse the applicant, they can. It’s good for applicants. They walk in with a fresh suit and clean haircut, a letter of reference, and a background check. The employer can make immediate hiring decisions.”

The service is priced from $10, for a basic criminal background check in the county where you live, to up to $85 for additional information, and applicants can use it for everything from job searches to checking out potential suitors online.

Tena Friery, research director for the San Diego-based Privacy Rights Clearinghouse, a nonprofit consumer group, said a big concern on both sides of the screening process should be accuracy of the information.

“We have no objection to background checks per se, and we think they are necessary,” said Friery. “But the information should be accurate. Nothing is foolproof. Having access before an employer sees the information, if there is a discrepancy, might go a long way in correcting some of the inaccuracy.”

The PRC is designed to keep consumers informed about how technology affects their privacy, intervenes in complaints and gives referrals, and advocates for consumer rights in local, state and federal public policy proceedings.

Another problem, she said, is relevancy.

“What does an employer need to know?” Friery asked. “A lot of information may not be directly related to the job available.”

Timing is another issue. Under the law, employers are required to inform an applicant about negative information in a report that has knocked them out of a job.

“Very often, once it reaches that point, it is too late,” said Friery. “In a very tight job market, an employer will have several equally qualified applicants.”

While employers are required to wait a “reasonable period” before filling the job, that is open to interpretation. But Bergstrom said that applicants probably would have sufficient time to fix erroneous facts.

“The company has to go back to the hiring pool, and then do a background check on that person,” he said. “It’s probably going to take a significant amount of time for that to elapse. It’s unlikely that the applicant wouldn’t have the opportunity to make corrections.”


Stolen Identities

Identify theft is a major problem facing both businesses and consumers, said Jay Foley, executive director of the San Diego-based Identity Theft Resource Center. There were 10,000 cases of identify theft in San Diego County during the last year, based on reports taken by law enforcement agencies, he said, and he estimates that identify theft has cost U.S. businesses and consumers more than $56 billion a year.

“We have heard horror stories about the fallout and adverse consequences from having faulty information from public records,” said Friery. “It is devastating. And with credit card theft, there also is the possibility that they not only run up credit card bills, but also are arrested for something. We do think that just because something is on paper, and a name is attached, it is not necessarily accurate.”

Added Friery, “Employers have rights and duties and obligations to make sure the person they hire is who they say they are, is qualified for the job, won’t run off with the company’s money, or engage in workplace violence. Personnel data is the lifeblood of any company. It is the coin of the realm, but it is a balancing act.”

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