Investigative Consumer Report Presentation Jun 09 07 Version


Published on

1 Like
  • Be the first to comment

No Downloads
Total Views
On Slideshare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Investigative Consumer Report Presentation Jun 09 07 Version

  1. 1. Presented at CALI Annual Conference 2009 Presented by Riley & Jane Parker Parker & Associates, Professional Investigations & Pre-Employment Profiles A Division of Parker & Associates, Professional Investigations CA PI 16105, 26392 PO Box 20398, Bakersfield, CA 93390 661.635.0633 Fx: 661.635.0634 [email_address] ,
  2. 2. <ul><li>Risk Management to Prevent: </li></ul><ul><li>Negligent hiring lawsuits </li></ul><ul><li>Workplace violence </li></ul><ul><li>Time lost recruiting, hiring, and training the wrong employee </li></ul><ul><li>Theft, financial loss, sexual harassment, and other workplace problems </li></ul>53% of all job applications contain inaccurate information (recent finding of The Society of Human Resource Management)
  3. 3. <ul><li>Fair Credit Reporting Act ( FCRA ) </li></ul><ul><li>U.S. Equal Employment Opportunity Commission ( EEOC ) </li></ul><ul><li>Americans with Disabilities Act ( ADA ) </li></ul><ul><li>California Investigative Consumer Reporting Agencies Act ( CICRA ) </li></ul><ul><li>Health Insurance Portability and Accountability Act ( HIPAA ) </li></ul><ul><li>Consumer Credit Reporting Agencies Act ( CCRAA ) </li></ul><ul><li>California Department of Fair Housing and Employment, Employment Discrimination ( CDFEH) </li></ul><ul><li>Investigative Consumer Reporting Agencies Act ( ICRAA ) </li></ul>
  4. 4. <ul><li>The employer can undertake the task. Potential legal landmines. </li></ul><ul><li>Online site offering flat fee – lack of accurate, thorough, and verified information. </li></ul><ul><li>Hire a full service Consumer Reporting Agency (CRA). Added bonus of limited legal exposure for employer </li></ul>
  5. 5. <ul><li>Wilson v. CARCO Group, Inc. </li></ul><ul><li>Applicant sued perspective employer Prudential for breach of contract and the CRA, CARCO Group, who provided the report for negligence and defamation. </li></ul><ul><li>To prove violation of the FCRA by a CRA evidence must confirm that: </li></ul><ul><li>1. CRA reported inaccurate or misleading information; </li></ul><ul><li>2. CRA failed to use reasonable procedures to compile information with maximum accuracy; </li></ul><ul><li>3. Plaintiff (applicant) was actually injured; </li></ul><ul><li>CRA's actions caused the plaintiff's injury. </li></ul><ul><li>Fortunately, Wilson did not prevail, but what was the </li></ul><ul><li>cost to the defend this case for the employer & CRA? </li></ul>LEGAL LANDMINES OF PERFORMING INACCURATE BACKGROUNDS
  6. 6. <ul><li>1. Employer’s Certification of “Appendix C Notice of Employer Responsibilities” </li></ul><ul><li>2. Provide applicant with “Summary of Rights Under the Fair Credit Reporting Act” </li></ul><ul><li>3. Obtain applicant’s written permission though appropriate releases </li></ul><ul><li>4. Copy of the report and notification of Summary of Rights to applicant </li></ul><ul><li>5. Send applicant Pre & Post Adverse Action Notices if applicable </li></ul><ul><li>  </li></ul>
  7. 7. <ul><li>“ Appendix C Notice of Employer Responsibilities” </li></ul><ul><li>Employer must certify to CRA that FCRA guidelines will be met: </li></ul><ul><li>- will use the information for employment purposes only. </li></ul><ul><li>- will not use the information in violation of any federal or state equal opportunity law. </li></ul><ul><li>- will obtain all the necessary disclosures and consents. </li></ul><ul><li>- will give the appropriate notices in the event that an adverse action is taken against an applicant based in whole or in part on the contents of the CR/ICR. </li></ul><ul><li>- will provide the additional information and release as required by law if an Investigative Consumer Report (ICR) </li></ul>
  8. 8. <ul><li>Provide applicant with “Summary of Rights Under the Fair Credit Reporting Act” ( . </li></ul><ul><li>The summary must be provided to the applicant when: </li></ul><ul><li>Initial background release is completed </li></ul><ul><li>Again when background report copy is provided as requested by applicant. </li></ul><ul><li>If and when letters of Adverse Actions are sent to applicant. </li></ul>
  9. 9. <ul><li>Background Release must include: </li></ul><ul><li>Clear and conspicuous disclosure that a consumer report may be requested provided in a separate document from the employment application. </li></ul><ul><li>Written consent must be obtained from the applicant through the release. </li></ul><ul><li>Release must contain a place for the applicant to request a copy of the report. (FCRA Sections 604 and 606), (CA Civil Code §1786.16) </li></ul><ul><li>Disclosure that an ICR may investigate &quot;character, general reputation, personal characteristics, and mode of living”, may contain interviews, job performance & reference verifications. ICR requires additional special procedures & disclosures. ICRAA (CA Civil Code §1786(B)(iii)). </li></ul><ul><li>Separate releases are required for obtaining credit reports and/or medical reports, including workers’ compensation EDEX reports. </li></ul>FCRA COMPLICANCE STEP 3 RELEASES
  10. 10. <ul><li>If a CRA compiles a consumer report with negative public records which may have adverse effect for the applicant, the CRA must provide to the applicant: </li></ul><ul><li>A copy of the Consumer Report / Investigative Consumer Report </li></ul><ul><li>A copy of &quot;Summary of Rights Under the FCRA” (FCRA Section 604). </li></ul><ul><li>And a cover letter to the applicant that the name and address of the perspective employer to who the report was sent. </li></ul><ul><li>SAMPLE LETTER: </li></ul><ul><li>Dear Applicant, </li></ul><ul><li>A decision is currently pending concerning your application for employment at “Employer’s Name & address.” Enclosed for your information is a copy of the consumer report that you authorized in regard to your application for employment, together with a &quot;Summary of Your Rights Under the Fair Credit Reporting Act.&quot; If there is any information that is inaccurate or incomplete, contact this office as soon as possible so an employment decision may be completed. </li></ul>FCRA COMPLIANCE STEP 4 PRE-ADVERSE ACTION
  11. 11. <ul><li>Purpose: provide applicant time to review & dispute the accuracy or completeness of findings in the report and opportunity to contact the Consumer Reporting Agency to dispute or explain. </li></ul><ul><li>It is in the employer's best interest to give the applicant an opportunity to explain any adverse information before denying a job offer. </li></ul><ul><li>Even if there were other reasons in addition to the Consumer Report for not hiring an applicant, these rights still apply. If the intended decision was based in whole or part on the Consumer Report, the applicant has a right to receive the report . </li></ul>PRE-ADVERSE ACTION CONTINUED
  12. 12. <ul><li>If the employer decides not to hire based on the report, the employer must: </li></ul><ul><li>Send the applicant a Notice of Adverse Action informing the job applicant that the employer has made a final decision and </li></ul><ul><li>Another copy of the form &quot;Summary of Your Rights under the FCRA.&quot; </li></ul><ul><li>Notice of Adverse Action must contain certain information. </li></ul><ul><li>SAMPLE LETTER </li></ul><ul><li>In reference to your application for employment, we regret to inform you that we are unable to further consider you for employment at this time. Our decision is, in part, the result of information obtained through the Consumer Reporting Agency identified below. </li></ul><ul><li>The Consumer Reporting Agency did not make the adverse decision, and is unable to explain why the decision was made. </li></ul><ul><li>You have the right to obtain within 60 days a free copy of your consumer report from the Consumer Reporting Agency as identified below and from any other consumer reporting agency which complies and maintains files on consumers on a nationwide basis. </li></ul><ul><li>You have the right to contact the Consumer Reporting Agency listed below to dispute any information contained in the report that you believe may be inaccurate or incomplete. </li></ul>STEP 4: POST NOTICE OF ADVERSE ACTION
  13. 13. <ul><li>Fair Credit Report purpose: </li></ul><ul><li>“ to prevent, or at least curtail </li></ul><ul><li>The dissemination of inaccurate </li></ul><ul><li>information about a consumer.” </li></ul><ul><li>Hauser v Equifax, Inc., 602 F.2 nd 811,816 (8 th Cir. 1979) </li></ul><ul><li>Avoid liability : FCRA requires CRA to follow “ reasonable procedures ” to assure maximum possible accuracy. </li></ul><ul><li>If a CRA accurately transcribes, stores, and communicates consumer information received from a source that it reasonably believes it to be reputable, and which is credible on its face, the agency does not violate this section simply by reporting … (the) information. FCRA 607(b) </li></ul><ul><li>Reasonable Procedures – “what a reasonable prudent person would do under the circumstances” balancing of the potential harm from inaccuracy against the burden on the agency. </li></ul>
  14. 14. <ul><li>FCRA requires that the CRA reinvestigate information contained in CR/ICR if disputed (Section 611) </li></ul><ul><li>CRA must document or delete the information from the report if unverified within 30 days. </li></ul><ul><li>CRA must send the consumer within 5 business days of re-investigation: </li></ul><ul><li>Statement of completion. </li></ul><ul><li>Notice that description of the procedures will be provided if requested. </li></ul><ul><li>Notice that the consumer has a right to add a statement to the file disputing the information </li></ul><ul><li>Notice that the CRA will notify any person who has received a consumer report for employment purposes within the past 2 years that the item has been deleted. The CRA must also provide the consumer with a revised consumer report. </li></ul><ul><li>The CRA may terminate the reinvestigation if it reasonably determines that the dispute is frivolous or irrelevant. 5 day notice to the consumer must be sent that identifies the reason and any information needed to further investigate the disputed matter. </li></ul>
  15. 15. <ul><li>Social Security Trace </li></ul><ul><li>Criminal history: county, state(s), national, federal </li></ul><ul><li>DMV driving history </li></ul><ul><li>Civil history </li></ul><ul><li>Bankruptcy and civil federal research </li></ul><ul><li>State Sexual Offender Registry </li></ul><ul><li>Ownership of real property </li></ul><ul><li>Credential & professional license verification </li></ul><ul><li>EDEX (WCAB) Records </li></ul><ul><li>Employment Verification </li></ul><ul><li>Reference Verification </li></ul><ul><li>Credit report </li></ul><ul><li>Corporations/Limited Partnership records </li></ul><ul><li>UCC filings </li></ul><ul><li>Board of Equalization records </li></ul><ul><li>Department of Consumer Affairs records </li></ul><ul><li>HHS-OSG </li></ul>
  16. 16. <ul><li>A Social Security Trace is the foundation of a </li></ul><ul><li>CR/ICR Report . It reveals: </li></ul><ul><li>Identifying information: name and name variations </li></ul><ul><li>AKA’s </li></ul><ul><li>Resident history of current & former addresses </li></ul><ul><li>“ Best Match” </li></ul>
  17. 17. <ul><li>Employer’s E-Verify Considerations: </li></ul><ul><li>Does the employer operate in AZ?  After September, government contractors. </li></ul><ul><li>May become mandatory for all employers </li></ul><ul><li>No direct cost to enroll, easy to use, but very time consuming to begin and for follow-ups on non-confirmations (weeks!) </li></ul><ul><li>E-Verify can be implemented at one, some, or all employer’s locations; </li></ul><ul><li>Reduces SSN no-matches & improves accuracy of wage and tax reporting; </li></ul><ul><li>Not infallible: error rate 10% for noncitizens; </li></ul><ul><li>Participation does NOT provide a “safe harbor” from worksite enforcement.   Some of the largest raids have involved employers using E-Verify (e.g ., the recent raid at Howard Industries in Laurel, Mississippi);  </li></ul><ul><li>Employers must provide access to its employment records to Homeland Security (DHS) and Social Security Administration: and </li></ul><ul><li>It creates a rebuttable presumption that the employer has not knowingly hired an unauthorized alien. </li></ul><ul><li> </li></ul><ul><li>Note: This article was published in the September 2008 issue </li></ul><ul><li>of the Immigration eAuthority. </li></ul>
  18. 18. <ul><li>The original social security card was designed by Fred Happel of Albany, N.Y in 1936. He was paid $60 for his work. </li></ul><ul><li>The first social security record was established for John David Sweeney on December 1, 1936 with a social security number of 055-09-0001. However, this is not to be confused with the *first social security card* issued. No one can point out the first card issued because hundreds of thousands of them were distributed around the same time through 45,000 post offices throughout US. Ironically, Sweeney died at the age of 61 without receiving any social security benefits. </li></ul><ul><li>The lowest SSN was given to Grace D. Owen of Concord, New Hampshire in 1936 and it was 001-01-0001. </li></ul><ul><li>The first recipient of social security benefits was Ernest Ackerman who received a lump-sum payment 17 cents in 1937. </li></ul><ul><li>Social security numbers are not allocated serially; meaning, the first number ever issued was not the lowest and the latest number issued will not be the highest. </li></ul>
  19. 19. <ul><li>078-05-1120 - the most misused SSN….some 40,000 people! Wallet manufacturer used secretary’s SSN to promote wallet sold at Woolworth Stores. In the peak in 1943, 5,755 people were using the number. SSA voided the number & issued secretary a new one. As late as 1977, 12 people were still using the number. </li></ul><ul><li>From the start program start in 1936 – 2005 $8.9 trillion have been paid out in benefits. </li></ul><ul><li>1936-2005 SSA has received $10.7 trillion in income. </li></ul><ul><li>  Invalid social security numbers include : </li></ul><ul><li>numbers with set of zeroes (000-xx-xxxx, xxx-00-xxxx, xxx-xx-0000), </li></ul><ul><li>2) numbers starting with 666 , </li></ul><ul><li>3) numbers 987-65-4320 through 987-65-4329 -marked for advertising, and </li></ul><ul><li>4) numbers with the starting three digits above 770, which are not yet allocated. </li></ul><ul><li>  Social security numbers not reassigned after death. </li></ul><ul><li>over 420 million SSNs so far </li></ul><ul><li>5,500,000 new numbers assigned a year, enough new numbers for several generations. </li></ul><ul><li>References : </li></ul><ul><li>Social Security History , government source </li></ul><ul><li>How Social Security Numbers Work , </li></ul><ul><li>Social Security Number , Wikipedia </li></ul>
  20. 20. <ul><li>Performing Criminal research: </li></ul><ul><li>Protects employer from negligent hiring exposure and </li></ul><ul><li>Helps reduce threat of workplace violence, theft, disruption, and other problems. </li></ul><ul><li>Failure by an applicant to disclose a prior criminal conviction can also be the basis not to hire. </li></ul><ul><li>What it will tell: Felony and Misdemeanor convictions, and pending cases, usually including date and nature of offense, sentencing date, disposition, and current status. </li></ul><ul><li>Seven year rule: In 12 states, California, included, CRA’s can only report criminal cases that are no older than 7 years from date of conviction, release from jail, prison, probation or parole. </li></ul><ul><li>Limitations/notes on using this information: Arrests not resulting in convictions cannot be reported. Employment cannot be automatically denied based upon a criminal record, but must show a sound business reason. </li></ul>
  21. 21. <ul><li>County Level Criminal Search: extensive “hands-on” search. Conduct criminal research for each county applicant lived in for a minimum of the past 7 years. </li></ul><ul><li>Statewide Criminal Search : Out of the fifty-eight counties in California, at least 50% are not available online through major suppliers. And out of those left, at least 3 only provide partial information. Always verify hits found at a county level . </li></ul><ul><li>  </li></ul><ul><li>Nationwide US Criminal Search : Provides access to the most comprehensive multi-jurisdictional criminal database available, containing millions of offense records. “Hits” must be verified on a county level basis.  </li></ul>
  22. 22. <ul><li>Federal Criminal Search: Federal law convictions: tax evasion, mail fraud, and drug trafficking charges, crimes that occurred on federal property. Tried in Federal District Courts. (PACER) </li></ul>National Wants and Warrants : This search identifies any current arrest warrants in addition to the criminal history search, these charges do not appear in court records until a ruling is made. Sex Offender Registry Search : Limited to “At Risk” employers . The National Sex Offender Registry list and/or related individual states. Often known as “Megan’s Law Registry”
  23. 23. <ul><li>Civil Records : Civil, Small claims, Family Law (Restraining Orders) </li></ul><ul><li>Judgments, Liens, and Bankruptcies </li></ul><ul><li>driving history for commercial and emergency vehicles – provides license status, expiration date, and accident and violation history for 3 years. May reveal a suspended license, arrest warrants, and DUI related driving offenses (potential substance abuse problem that could affect job performance). </li></ul><ul><li>Workers’ Compensation History (EDEX) POST OFFER (additional release required and job functionality justification) ADA compliance issues </li></ul><ul><li>Credit Report (requires additional release and position justification) useful if the applicant will have check-writing privileges, access to company funds, or a highly compensated position. EEOC considering issuing additional guidelines to prevent “discriminatory if they are not essential to a hiring decision.” </li></ul>
  24. 24. <ul><li>Corporations/Limited Partnership records </li></ul><ul><li>Uniform Commercial Code filings </li></ul><ul><li>Board of Equalization records </li></ul><ul><li>Department of Consumer Affairs </li></ul><ul><li>OIG/GSA Name Search : for health care industry. Through the Department of Health and Human Services (HHS), the Office of Inspector General (OIG), and the General Services Administration (GSA) researches for those individuals excluded from participating in Medicare, Medicaid, or other federally funded health care programs. </li></ul><ul><li>Re-Screening: Original screening is a photograph in time of applicant’s behavior, re-screening checks to uncover any changes in behavior that have occurred after the original screening. </li></ul>
  25. 25. <ul><li>CCH® HR MANAGEMENT - 02/23/09 </li></ul><ul><li>Ron Brand, Law Offices of Fisher & Phillips </li></ul><ul><li>Employment rate at a 16-year low, & larger pool of qualified candidates. Employers want to: hire the most qualified personnel, & know exactly who they are hiring. Business owners and CRAs are turning to Internet searches—and finding more personal information than they bargained for just by Googling their names. Indiscretions are made permanent in cyberspace for all to see, including prospective employers. </li></ul><ul><li>Potential discrimination and invasion of privacy claims against employers & CRAs who use internet . If an employer finds information on a site that identifies an applicant’s disability or medical condition, the employer could be slapped with a discrimination lawsuit if they base their its decision not to hire him/her on that information. </li></ul><ul><li>Legality of using information found on social networking sites for a background check to refuse to hire a job applicant or terminate an employee? Information can’t be used in a discriminatory manner or if prohibited by law (posing as “friend” to gain access). Consideration - what effect terminating employees based on Internet searches may have on the morale of the rest of their employees. </li></ul><ul><li>Realization that information found on the Internet is not necessarily accurate or reliable. </li></ul>
  26. 26. <ul><li>Employment Verification : verifies dates of employment, position, starting & ending pay, performance, and reason for departure. Exposes unexplained gaps in employment. Demonstrates ER’s due diligence if job duties, performance, salary, strengths and weaknesses, eligibility for rehire, and other detailed information is requested. Fees for 3rd party/900 services. </li></ul><ul><li>Education Verification: confirms degrees, diplomas, and certificates from universities, colleges and schools, & uncovers false or inconsistent information. (Student Clearinghouse) </li></ul><ul><li>  </li></ul><ul><li>Professional License Verification : verifies licensure, status with the issuing authority, date of issuance & expiration, & disciplinary actions on file. </li></ul><ul><li>  </li></ul><ul><li>Personal and Professional Reference Check : focuses on colleagues, co-workers, and other references listed on the resume to assess capabilities, character and work record. </li></ul><ul><li>Contact &quot;developed&quot; references for a better picture. Falls under the “Investigative Consumer Report” requirements(ICR). </li></ul>
  27. 27. <ul><li>References: In-house references obtained by an employer do not have to be turned over to applicants. (AB 1068). ICR’s reference reports done by CRA must be provided to applicant. </li></ul><ul><li>Providing Reports to Applicants: Each applicant must have the ability to check off a box on the disclosure sheet and have the background-screening firm send the report directly to the applicant. </li></ul><ul><li>Limitations on Employers’ “do-it-yourself” investigations: Employers who collect public records must give them to the applicant/employee within 7 days unless the employer suspects misconduct or wrongdoing, in which case supplying the information may be delayed. Employers who use this procedure must provide a form to all applicants/employees with a box that, if checked, permits a person to waive the right to receive the copy of any public record. If the investigation results in an adverse action, there are additional requirements as well. </li></ul><ul><li>Only California licensed attorneys and private investigative companies qualify to provide Investigative Consumer Reports. </li></ul>
  28. 28. <ul><li>California Law </li></ul><ul><li>Investigative Consumer Reporting Agencies Act (ICRAA), CA Civil Code §1786 et seq. </li></ul><ul><li>Consumer Credit Reporting Agencies Act (CCRAA), CA Civil Code §1785 et seq. </li></ul><ul><li>To access the California Civil Code, go to . Click on California Law. Then click &quot;Civil Code&quot; and either insert the section number or scroll through the entire Civil Code to find the specific citation. </li></ul><ul><li>Federal Law </li></ul><ul><li>Fair Credit Reporting Act (FCRA) (15 U.S.C. §§1681 et seq.), </li></ul><ul><li>Publications </li></ul><ul><li>Federal Trade Commission, &quot;Using Consumer Reports: What Employers Need to Know,&quot;   </li></ul><ul><li>Federal Trade Commission, &quot;Negative Credit Can Squeeze a Job Search , &quot;   </li></ul><ul><li>Federal Trade Commission, &quot;How to Dispute Credit Report Errors,&quot;   </li></ul><ul><li>Privacy Rights Clearinghouse . &quot;Employment Background Checks: A Jobseeker's Guide,&quot;   </li></ul><ul><li>U.S. Bureau of Labor Statistics, Occupational Outlook Handbook. (information about many jobs, including background check requirements), </li></ul><ul><li>California Employment Development Department, . Find information about California jobs that require a license and link to the appropriate licensing agency.   </li></ul><ul><li>California Department of Fair Housing and Employment, Employment Discrimination,   </li></ul><ul><li>California Department of Social Services, . Background check guidelines for employees who work with children, the elderly, or the disabled. </li></ul><ul><li>Articles of Interest and Other Perspectives </li></ul><ul><li>&quot;Background Checks and Investigations,&quot; WAAG and Co., Employment Law-HR Consulting, (Scroll to pages 6-7.)   </li></ul><ul><li>&quot;Why California Is Different,&quot; Employment Screening Resources, </li></ul><ul><li>For articles on employment screening, visit the following web site and use the search feature with the term &quot;background check.&quot; (no endorsement implied)         -- </li></ul>