The Federal Trade Commission has written to three companies and warned them that their applications for mobile devices such as smartphones or tablets may violate the Fair Credit Reporting Act. The FTC wrote to Everify Inc. about its Police Records app, InfoPay Inc. about its Criminal Pages app, and Intelligator Inc. about its Background Checks, Criminal Records Search, Investigate and Locate Anyone, and People Search and Investigator apps.
The FTC warned the apps marketers that, if they have reason to believe the background reports they provide are being used for employment screening, housing, credit, or other similar purposes, they must comply with the Act. [...]
According to the FTC, some of the apps include criminal record histories, which bear on an individual’s character and general reputation and are precisely the type of information that is typically used in employment and tenant screening. [...]
The FCRA is designed 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.
Under the FCRA, operations that assemble or evaluate information to provide to third parties qualify as consumer reporting agencies, or CRAs. Mobile apps that supply such information may qualify as CRAs under the Act. CRAs must take reasonable steps to ensure the user of each report has a ‘permissible purpose’ to use the report; take reasonable steps to ensure the maximum possible accuracy of the information conveyed in its reports; and provide users of its reports with information about their obligations under the FCRA. In the case of consumer reports provided for employment purposes, for example, CRAs must provide employers with information regarding their obligation to provide notice to employees and applicants of any adverse action taken on the basis of a consumer report.
According to the letters, the agency has made no determination whether the companies are violating the FCRA, but encourages them to review their apps and their policies and procedures to be sure they comply with the FCRA.
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