Founded as a non-profit trade association in 2003, the Professional Background Screening Association (PBSA) was established to represent the interest of companies offering employment and tenant background screening services. The initial members wanted to establish and promote a high level of ethics and performance standards for the screening industry. The Association currently represents over 880 member companies engaged in employment and tenant background screening across the United States and around the globe. Member companies range from Fortune 100 companies to small local businesses, conducting millions of employment-related and tenant background checks each year. In the US, PBSA Member companies are defined as “consumer reporting agencies” according to the Fair Credit Reporting Act (FCRA) and are regulated by both the FTC and CFPB.
Twice each year, PBSA holds conferences where industry colleagues gather, legal and compliance experts attend, and together we review the state of the background screening landscape. PlusOne Screening Solutions has been an active attendee at these conferences as they afford the opportunity to identify trends and changes we are seeing across the industry. This blog will highlight a few of those such 2023 trends:
1 – Regulatory Enforcement Ramping Up….
We are closely watching the actions of our regulators in the United States – the Federal Trade Commission and Consumer Financial Protection Bureau – as they march down a path of asking questions and starting to poke around into the background-checking industry. We’d love to think they just want to learn but this typically signals a precursor to increased enforcement activities. These activities are meant to ensure compliance with the Fair Credit Reporting Act, which guides the consumer report (background screening) process. Two areas receiving more than their share of attention at present are the tenant screening (rental) industry and data brokers, who provide information to the industry. Typically, enforcement will be on ensuring the requirements of the legislation are met, determining if further guidance or legislative structure is needed and which areas of the industry are most in need of regulation.
2 – Accuracy Claims
While there are all kinds of violations and cases under the FCRA that may be pursued by zealous legal counsel, topping that list are accuracy claims. A key tenant of the FCRA is to ensure complete and accurate information about an individual is used when making decisions. If there is any concern about the accuracy of the information, it impacts the results and compliance with the law. Accuracy can be anything from incorrectly identifying an individual, including incorrect or incomplete information on a consumer report, or other information that may even be human error. Organizations providing consumer report information are encouraged to be extremely vigilant in their processes and ensure they have clear guidelines for staff to follow when working with such data.
Related to this is the continued scrutiny of information that could be deemed facially inconsistent. The FCRA requires that organizations providing consumer reports maintain reasonable procedures to assure maximum possible accuracy, and this includes procedures to screen for and eliminate logical inconsistencies, to prevent the inclusion of facially false data in consumer reports. Illogical reporting of information relating to consumers, including impossible information or information inconsistent with other reported information, are two examples of this.
3 – Continued Conflict with State and Federal Law
The arm wrestle continues for organizations to meet the requirements of the federal, FCRA, law and the myriad of state and local/county level regulations that govern background checks. In some rulings, there is preemption, and in others, it remains a difficult position for organizations to comply. The additional challenge is when federal matters are brought in state court or in a jurisdiction other than where it would most logically reside. Not meeting the requirements of either law is not viewed favorably by regulators.
4 – Data Privacy Laws Created at State Level
In our continually evolving digital economy, where access to information, protection of that information, and the desire to demonstrate to jurisdictions around the world that the US takes data protection seriously, numerous states are beginning to enact data privacy laws. Most of these laws focus on the protection, sharing, and obligations of personally identifiable information. This is defined as any information or combination of information that results in the identification of an individual. This information typically does not include business-related information.
From PlusOne’s perspective, most of the information that would fall under these regulations will be in the background screening side of our business, where we require the collection of date of birth, Social Security Number, name, and address information. Most of the data protection laws passed in the handful of states so far contain an exemption for data collected under the FCRA, which covers the data we have. This exemption is in place because the FCRA already contains provisions for the appropriate collection, use, storage and even destruction of information belonging to individuals. Compliance with the FCRA will demonstrate compliance with many of the same goals as the data privacy legislation is trying to achieve.
Conclusion
PlusOne continues to monitor the industry and work with our partners, vendors, customers, and legal contacts to ensure we remain aware of the areas of focus for our regulators. By maintaining our PBSA Accreditation, we ensure continued improvement and professionalism in our operations and support those operations with documented and consistent work processes. By training our team members on these processes and remaining open to changes, we have been successful in delivering compliant background-checking services to our customers for almost 20 years.
