Where HireRight Solutions went wrong

Most job seekers are familiar with the basics:  Wear a clean shirt, extend a firm handshake, and don’t ask about vacations in the first 10 minutes of the interview.  But these days more businesses are digging deeper.  Tulsa-based HireRight Solutions is a background screening company that thousands of employers use to check out current employees and people applying for jobs.  When it comes to Fair Credit Reporting Act compliance, the FTC says HireRight Solutions got it wrong by not using reasonable procedures to ensure the accuracy of the information it was selling. The upshot: a $2.6 million civil penalty, the second-largest ever in an FTC FCRA case.

The background screening reports that HireRight Solutions sells are “consumer reports” under the FCRA.  How so?  We’re leaving out some of the legalese, but the short answer is that they include information "bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer’s eligibility” for credit, insurance, employment, or other purposes authorized under the FCRA. (Yes, that’s the short answer.)

Companies that sell or provide those reports are “consumer reporting agencies” under the statute.  (Just as an aside, the law uses the word “agency,” but these are private companies we’re talking about — not agencies like government agencies.)  Under the FCRA, consumer reporting agencies have a legal obligation to follow reasonable procedures to assure the maximum possible accuracy of the information the reports contain.  That's where the FTC says HireRight Solutions didn’t get it right.

According to the complaint, the company didn’t take reasonable steps to make sure the info in the reports was current and reflected updates, like the expungement of criminal records.  The FTC says that sometimes the reports included multiple entries for the same offense.  What's more, some reports listed convictions for people other than the applicant or employee — even though the person with the criminal record had a different middle name or date of birth.  If a tomato soup stain on a tie can torpedo a job applicant’s chances, imagine the effect of a wrongly reported rap sheet.

But the violations didn’t end there.  The FCRA gives people the right to know about information reported to potential employers and sets up mandatory procedures people can use to challenge information they believe is inaccurate.  According to the complaint, the company failed to live up to the FCRA’s requirements that it turn over files to people who ask for them, didn’t conduct a reasonable investigation when people disputed the accuracy of information, and didn’t give people written notice of the results of investigations.  For example, the FTC alleges that HireRight Solutions had a big backlog because it didn’t hire enough staff to respond to people’s concerns about inaccuracies.  The complaint also charges that the company set up unreasonable hoops people had to jump through to exercise their rights under the FCRA.

In addition, the FCRA has special requirements for consumer reporting agencies when their reports contain public record information that’s used for employment purposes.  If that info is likely to have an adverse effect on a person’s ability to get a job, the law gives companies like HireRight Solutions two choices: 1) notify the person anytime public record information is being reported; or 2) maintain “strict procedures” designed to ensure that reported public record data is complete and up to date.  The complaint charges that HireRight Solutions had a system in place for notifying people, but it was too clunky to be of much practical use.  The FTC also charged that the company didn’t maintain the strict procedures the law requires.  In addition to the $2.6 million penalty, the stipulated order puts provisions in place to change how HireRight Solutions does business going forward.

Interested in a refresher on the dos and don'ts of using reports in the hiring process?  Read Using Consumer Reports: What Employers Need to Know, available on the BCP Business Center's Credit Reporting page.  We also have information especially for your HR team.

If you're looking for a job, learn more about your rights under the FCRA by reading Employment Background Checks and Credit Reports and watching a new video from the FTC:

 

14 Comments

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I believe the most sad yet entertaining thing about this is that companies that continue to use this company are using someone with a "criminal" record (Second Largest Fine from the FTC) to do a criminal background check.

I was a contractor for a financial firm for 3 years. They performed a CBC check and everything was fine. They were eager to bring me into a full-time position. Their HR department used HireRight which supplied them some inaccurate information. They rescinded on the offer and terminated my contract. I have gone through HireRight and appealed the information. I provided them a certified SBI report I had done last year showing HireRight had the wrong information. I went to the courts and also verified the information was wrong. All I get from HireRight is that it takes them 10 plus days to review the appeal. Fortunate for me I am in a area that actively hiring and I already have had several interviews and looks like I will be able to land another position else where. I feel victimized because I worked hard for 3 years and had all my management on my side for the position.

It's a civil penalty, not a criminal record in the least. That said, they're still a shady business.

To find a career path that is fulfilling and in balance with your full range of values; from how you want to be spending your work time and the legacy you want to leave, to how much money you want to be making.

In my endeavors as a Career Coaching Atlanta, GA, I have seen some cases where the reporting agency, whether Hire Right, or one of the big 3, has so fouled up the report that the client/candidate will likely never be hired by a company until the report is corrected. Its a good idea to be aware of what is contained in these reports, prior to starting your job search. The article is in that respect, very helpful.

HireRight is doing enormous damage to people's lives. To the employers: I do wonder why being unable to pay a medical bill for an emergency room visit means that I will never be able to earn a living again in my life. I'd love to pay the bills, but how? This is a total 'Catch 22' I never dreamed this would happen when I went back to school and earned a degree so I could find work. There isn't a more trustworthy person, but I've lost two job offers because of this.

I think it is worse than any of you can imagine. HireRight claims to own the data they collect from you. This is your personal identity and work history. They may share it with their partners. If the company is acquired, your data is part of the sale. Ask yourself if you really understood or wanted them to be custodians of this data - or why it is necessary for them to store it after the background check is complete.

This data is valuable, and will eventually be targeted by criminals and hackers. Does HireRight encrypt the database where your data is stored? No, their website does not confirm this.

Individuals should have the right to have their identity data deleted from HireRight after the process of verification is completed. Why doesn't the FTC give us remedy for this? Please FTC step in here.

It is also wrong of your employer to force you to directly work with this 3rd party company, who's management and custody of your identity you may not trust. By forcing you to enter data into HireRight, your company is washing their hands clean of the custodial risk of that data. Yet, your company will make you sign a confidentiality agreement (contract) where they have recourse directly with you under defined terms. But, they do not grant you this same courtesy with your private identity data.

What's the answer here? Do we start demanding our companies sign a confidentiality agreement with our personal data? Should we demand FTC offer protection and remedy here? Thoughts?

I share the same idea as you. they still retain my information and remind me about things. why do they have my information when the interview is complete and i am working with this employer for more than 2 years now?!!!
did you find a way to remove you from their database?
I agree, FTC should give us a way in here to remove our info before we hear it in the news some hacker stole all the info.

I was offered a job with the understanding I would have a criminal background check. I have never been arrested - so no problem.

Wrong, HireRight only uses your name and date of birth to verify this information (I was told that via my phone call with them). If you are John Smith, be prepared to have a ton of so called convictions. right now, I have personally confirmed that my middle name and SSN are different that what is on file in the county they said I was arrested in.

I also paid for a search for my name in the state database that came back without any matches.

Now I am waiting for them to do the same thing.

What can you expect from a company who forced it's African American Employees to remove any pictures of President Barack Obama from their work areas.
As it relates to background checks do you really expect ill-trained people in Oklahoma, in the Phillipines and India to do accurate background checks.
Check Hireright's background - processing a background check based on one's last name, first name and date of birth and expecting accuracy is comical.

I was offered employment and then the offer was rescinded based on informatio provided by HireRight. I have been made another offer by an employer and they also use HireRight. My plan is to inform them of my history with HireRight and go from there.

I just got a formal job offer today from a great co. that uses HireRight! Im a little concerned after all the negative posts I have read all over the internet! Initiated the online background check process today! I will post more as the process moves forword. We will see if the 2.6 million fine has helped the process!!!

HireRight, they are owned by Kroll and Altegrity. Kroll's had a whole bunch of problems reported in the press.

How will the job seekers whose careers have been damaged be compensated for HireRight's conduct ? How will the "partners"Taleo, Kenaxa, etc. change due to this FTC decision ? Why is this company allowed to continue operating ?

Seems that the companies using HireRight and their partners are not into hiring persons for their skills and abilities. So where is the equal employment opportunity ? Considering these events, the EEOC should step up or be dissolved since they certainly are not actively supporting equal opportunity that benefits the damaged job seekers (nice PowerPoint presentations do not enforce EEO).

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