CFPB fines employment screening firms for alleged inaccurate reports

Financial regulators are forcing two of the largest employment background screening companies to pay $12.5 million in fines and relief payments for allegedly reporting inaccurate information about job applicants.  

The Consumer Financial Protection Bureau (CFPB) said General Information Services and its affiliate, e-Background-checks.com Inc. (BGC), unlawfully included civil suit and civil judgment information from more than seven years ago in reports they provided to prospective employers.

“General Information Services and its affiliate failed to take basic steps to provide accurate background screening reports to employers about job applicants,” CFPB Director Richard Cordray said in a news release. “Today, we are holding two of the largest companies in this market accountable for cleaning up the quality of their reports.”

The agency has ordered the companies to correct their practices, pay a $2.5 million civil penalty and $10.5 million in relief to they victims. The CFPB said the reports potentially harmed applicants’ employment eligibility and reputations.

South Carolina-based GIS and its affiliate, BGC, based in Texas, collectively generate and sell more than 10 million consumer reports about job applicants to prospective employers annually. The CFPB said the reports include criminal history information and civil records, among other types of data, that’s used to determine the hiring eligibility of applicants and make other types of employment decisions. 

The CFPB said the companies violated the Fair Credit Reporting Act by failing to employ reasonable procedures to assure the accuracy of the information contained in the reports.