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FTC warns makers of background checking apps

Smartphone apps may violate a consumer credit protection law, the agency says

By Grant Gross
February 7, 2012 02:39 PM ET

IDG News Service - The U.S. Federal Trade Commission has sent warning letters to the makers of six mobile apps used for background checks, saying the apps may violate a consumer credit protection law.

The FTC has sent the warning letters to Everify, marketer of the Police Records app; InfoPay, marketer of the Criminal Pages app; and Intelligator, marketer of Background Checks, Criminal Records Search, Investigate and Locate Anyone, and People Search and Investigator apps. The agency released the names of the three companies Tuesday.

The apps may violate the Fair Credit Reporting Act (FCRA), intended to protect the privacy of consumer report information and ensure that the information supplied by consumer reporting agencies is accurate. Consumer reports are communications that include information on an individual's character, reputation, or personal characteristics and are used or expected to be used for purposes such as employment, housing or credit, the FTC said.

The three companies did not immediately respond to requests for comments on the FTC letters.

The FCRA requires companies designated as consumer reporting agencies to take reasonable steps to ensure the accuracy of information they sell and to tell employers using their services about their obligations to applicants. Under the law, employers must tell applicants if they take adverse actions based on the background reports.

Some of the apps contain information about criminal records, which is the type of information typically used in employment and tenant screening, the FTC said in a press release. "Employers are likely to use such criminal histories when screening job applicants," the FTC letter said. "If you have reason to believe that your reports are being used for employment or other FCRA purposes, you and your customers who are using the reports for such purposes must comply with the FCRA."

The agency hasn't determined whether the companies are violating the FCRA, but the letter encourages them to review their apps and their policies to ensure compliance.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

Reprinted with permission from IDG.net. Story copyright 2014 International Data Group. All rights reserved.
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