| Entities | |
| Topics and Issues | Background checks (71) |
In September 2023, from an FTC announcement, the Commission “will require background report providers TruthFinder and Instant Checkmate to pay $5.8 million to settle charges that they deceived consumers about whether consumers had criminal records and that the companies violated the Fair Credit Reporting Act (FCRA) by operating as consumer reporting agencies while, among other things, failing to ensure the maximum possible accuracy of their consumer reports.” The complaint is available online.
According to the release, the companies “market people-search services, allowing users to search unlimited background reports on individuals, and charge monthly subscription fees to view the full reports. In 2014, Instant Checkmate agreed to settle FTC charges that the company previously violated the FCRA by failing to take reasonable steps to make sure that its background reports were accurate and that its users had a permissible reason to have them.”
The FTC said the companies are CRAs “because they have assembled and evaluated information on consumers into background reports and have marketed and sold those reports for employment and tenant screening purposes.” The FTC said that they violated the FCRA because they “fail[ed] to ensure the accuracy of their reports,” provided consumer reports without a permissible purpose, and failed to implement reasonable procedures to limit those who could obtain their background reports.” The FTC also said that the companies failed to follow the FCRA requirements around reinvestigations.
According to the proposed order, which is pending judicial approval, TruthFinder and Instant Checkmate and their affiliated companies will be required to pay a $5.8 million penalty. Other provisions of the order:
- Require the companies to establish and implement a comprehensive monitoring program to regularly review, assess, and determine the extent to which each of the companies are operating in whole or in part as a CRA and to ensure that they are complying with the requirements of the FCRA;
- Permanently prohibit them from failing to comply with the FCRA when they are operating as a CRAs;
- Permanently prohibit them from misrepresenting the accuracy of their reports or making similar misrepresentations as outlined in the complaint; and
- Require them to mandate that endorsers disclose any material connections and to monitor any endorsers who have a material connection to the company to ensure they are disclosing such connections.
The FTC has a case page for this matter, FTC v. TruthFinder.