Screening Companies Pay $16.5 million in Fines, Penalties, and Restitution for Multiple Violations

TeleCheck Agrees to pay $3.5 million to settle FCRA Violations

TeleCheck Services, Inc., a Houston based consumer reporting agency (CRA), along with its associated debt-collection entity, TRS Recovery Services, Inc., have agreed to pay $3.5 million to settle Federal Trade Commission charges that they violated the Fair Credit Reporting Act (FCRA). This settlement matches the second largest fine paid by Certegy Check Services, Inc. earlier this year for similar violations.

TeleCheck compiles consumers’ personal information and uses it to help retail merchants throughout the United States determine whether to accept consumers’ checks. Under the FCRA, consumers whose checks are denied based on information TeleCheck provided to the merchant have the right to dispute that information and have TeleCheck investigate and correct any inaccuracies.

The FTC’s complaint alleges, among other things, that TeleCheck did not follow proper dispute procedure, including refusing to investigate disputes. The complaint also alleges that TeleCheck failed to follow reasonable procedures to assure the maximum possible accuracy of the information it provided to its merchant clients as required by the FCRA, and failed to promptly correct errors on consumers’ reports.

In addition, the complaint alleges that TRS, which handles consumer debt taken on by TeleCheck and furnishes information about consumers to TeleCheck, violated the requirements of the FTC’s Furnisher Rule, which requires entities furnishing information to CRAs to ensure the accuracy and integrity of the information provided. The order settling the FTC’s charges requires TeleCheck and TRS to alter their business practices to comply with the requirements of the FCRA and the Furnisher Rule in the future. This case is part of a broader initiative to target the practices of data brokers, which often compile, maintain, and sell sensitive consumer information. Consumer reporting agencies like TeleCheck are data brokers that sell information to companies making important decisions about consumers, such as their ability to get credit or pay for goods and services by check.

Screening Companies Pay $13 million in Restitution and Civil Penalties

General Information Services and its affiliate, Inc., agreed to pay $13 million in restitution and fines to settle charges by CFPB (Consumer Financial Protection Bureau) that they violated FCRA (Fair Credit Reporting Act) by failing to ensure their reports had accurate information about job applicants. According to the CFPB, the two companies did not have policies to ensure the accuracy of the information obtained by them for criminal history and civil records checks for people with common names since there was no middle name requirement and no audit process.

As a result, the CFPB stated that nearly 70 percent of complaints filed by job applicants about the criminal history in their background checks resulted in a change or correction. Job applicants reported that the errors included inaccurate criminal records, crimes that had been expunged or dismissed, and misdemeanors reported as felonies, according to the CFPB.

Although the South Carolina-based companies did not admit to wrongdoing, they did signed a consent order with the CFPB to pay $10.5 million or $1,000 per person to affected job applicants and a $2.5 million civil penalty. The companies, which generate more than 10 million job applicant reports annually, also agreed to establish a written process to ensure information obtained during their background checks were accurate.

A minor mistake, a careless oversight or a small violation may not seem important, but when it comes to the background screening process these trivial errors have cost employers millions of dollars in fines, penalties, judgments, lawyer fees and lost time. As a Consumer Reporting Agency (CRA), Global Safety Network (GSN) understands, follows and advises our clients on compliance and regulations while establishing a legally defensible process to ensure that even the small errors won’t cost you big bucks. Call GSN today to learn more about our Background Screening Solutions customized for your business and industry.


2 Responses to “Screening Companies Pay $16.5 million in Fines, Penalties, and Restitution for Multiple Violations”

  1. Millicent says:

    I don’t even know what to say, this made things so much easier!

  2. Derek Walters says:

    Thank you very much for your comment. We are glad this article was beneficial to you!

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