by Karl R. Ulrich, Esq. – Sebaly Shillito + Dyer, a Legal Professional Association

In our modern information age, the challenge for background screening is no longer “how do I find information?” Now, the real challenge is: “Am I using accurate information for the right reasons?” If you search a person or company name on the internet, you would likely find more information than you could possibly use – most of it irrelevant to the purpose at hand.

Some of it might be simply wrong – the product of an overactive imagination, the latest conspiracy theory or posted by someone with a grudge. (Just because it’s on the internet, it doesn’t necessarily mean it’s true.) Some of the information might be embarrassing, and some of it probably not even intended for public consumption.

The Fair Credit Reporting Act (“FCRA”) is a federal law which largely pre-dates the Web. But, in some ways, the FCRA anticipated the challenges posed by unlimited and unfiltered information overload. A consumer reporting agency or “CRA” is someone regularly engaged in the practice of assembling or evaluating information on consumers for the purpose of furnishing consumer reports to third parties. The FRCA limits the purposes for which these consumer reports furnished by a CRA may be used.

A CRA may furnish a consumer report in response to a court order or subpoena, or in response to a request by the subject himself. Other common permissible uses include: credit, employment, insurance underwriting, government licensure, certain business transactions involving the consumer, and in certain child support contexts. A CRA will generally require the customer or user to certify that the information will be used for legitimate purposes.

An improper purpose, or reliance of inaccurate information, can give rise to legal liability. Imagine the employer who failed to hire someone who had a criminal record, only to find out later that the record belonged to a different “James Smith.” A good CRA has procedures for verifying accuracy and permissible purpose. Anything less could place the customer/user at risk.

About the Author

Karl, born in Chicago, moved to Ohio to join Sebaly, Shillito & Dyer in 1991. As a firm shareholder since 1994, Karl is a member of the firm’s management team and founder and head of the Labor & Employment Practice Group. Karl focuses primarily on counseling management clients on a wide range of labor and employment matters and immigration compliance.

Karl received his law degree from the University of Notre Dame, and is Board Certified by the Ohio State Bar Association as a Specialist in Labor & Employment Law. He is a member of the Dayton, the Ohio State and the American Bar Associations and the Missouri Bar and admitted to practice in numerous federal courts across the country. Karl has been recognized by Ohio Super Lawyers and Best Lawyers in America.