WASHINGTON — The Consumer Financial Protection Bureau has fined two large employee background screening companies a total of$13 million for creating inaccurate reports.
The two affiliated firms, General Information Services in South Carolina and e-Background-checks.com in Texas, will have to pay $10.5 million to harmed consumers, as well as a $2.5 million civil penalty, the CFPB announced Thursday.
"General Information Services and its affiliate failed to take basic steps to provide accurate background screening reports to employers about job applicants," said CFPB Director Richard Cordray in a press release. "Today, we are holding two of the largest companies in this market accountable for cleaning up the quality of their reports."
In addition to the fines, GIS and BGC, which together produced about 10 million reports on job applicants per year, will have to revise their practices by implementing an auditing process, to be adjusted at least twice a year, and hire an independent consultant.
The CFPB also ordered GIS and BGC to implement new procedures to ensure the accuracy of its reports, which includes searches into the criminal history and historic records of prospective employees.
The companies did not ask their clients for the middle names of the individuals they were investigating, and had no written policy for researching customers with common names, the CFPB contends.
As a result, consumers might have been overlooked for jobs or seen their reputation wrongfully damaged, the CFPB noted. Harmed consumers are eligible to receive approximately $1,000 each in relief.