Pitched Mobile Apps Offering Job Applicant Screening Tools
An enterprise that compiled and sold criminal record reports has agreed to settle Federal Trade Commission charges that it operated as a consumer reporting agency without taking consumer protection measures required by the Fair Credit Reporting Act (FCRA). The FTC’s settlement order, which prohibits the respondents from future FCRA violations, resolves the agency’s first FCRA case involving mobile apps.
According to an administrative complaint filed by the FTC, Filiquarian Publishing LLC, Choice Level LLC, and their CEO, Joshua Linsk, failed to ensure that the information they sold was accurate and would be used only for legally permissible purposes. The FTC also alleged that they failed to tell users of their criminal record reports about their obligations under the FCRA, including the requirement to notify consumers if an adverse action was taken against them based on a report.
According to the FTC, Filiquarian claimed consumers could use its mobile apps to access hundreds of thousands of criminal records and conduct searches on potential employees. One app stated, “Are you hiring somebody and wanting to quickly find out if they have a record? Then Texas Criminal Record Search is the perfect application for you.” Consumers who paid 99 cents to download one of its apps from iTunes or the Google Android store (now GooglePlay) could conduct an unlimited number of searches for criminal records within a particular state or county. Choice Level provided the criminal records to Filiquarian that were accessed via Filiquarian’s mobile apps.
As alleged in the complaint, both companies used disclaimers stating that they were not FCRA compliant; that their products were not to be considered screening products for employment, insurance, and credit screening; and that anyone who used their reports for such purposes assumed sole responsibility for FCRA compliance. According to the FTC’s complaint, these disclaimers are not enough to avoid liability under the FCRA because the company advertised and expected that its reports could be used for employment purposes.
The settlement order bars the respondents from furnishing a consumer report to anyone they do not have reason to believe has a “permissible purpose” to use the report, failing to take reasonable steps to ensure the maximum possible accuracy of the information conveyed in its reports, and failing to provide users of its reports with information about their obligations under the FCRA.
To learn more about mobile apps, read the FTC’s Understanding Mobile Apps: Questions and Answers. Business owners should read Marketing Your Mobile App: Get It Right from the Start and Protecting Personal Information: A Guide for Business. To learn more about background screening reports, and employers’ obligations and employees’ rights under the FCRA, read Using Consumer Reports: What Employers Need to Know, Employment Background Checks, and What to Know When You Look for a Job, and see the video, What to Know When Looking for a Job.
The Commission vote to accept the consent agreement package containing the proposed consent order for public comment was 5-0. The FTC will publish a description of the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through February 11, 2013, after which the Commission will decide whether to make the proposed consent order final. Interested parties can submit written comments electronically or in paper form by following the instructions in the “Invitation To Comment” part of the “Supplementary Information” section. Comments in electronic form should be submitted using the following Web link: ftcpublic.commentworks.com/ftc/filiquarianconsent and following the instructions on the web-based form. Comments in paper form should be mailed or delivered to: Federal Trade Commission, Office of the Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC is requesting that any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions.
NOTE: A consent order is for settlement purposes only and does not constitute an admission by the respondent that the law has been violated. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $16,000.
The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call
1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.
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