FTC warns background screening apps could be illegal

The Federal Trade Commission (FTC) has warned six companies that their mobile applications for performing background checks might violate federal law. 

The FTC said mobile apps that allow users to look up people's information, including criminal histories, might be subject to the Fair Credit Reporting Act, which requires consumer-reporting agencies to comply with a set of standards to ensure that their information is accurate.

A "consumer-reporting agency," defined as a company that compiles personal information for third parties, is also required to notify employers who use the information about their obligations under the law.

“If you have reason to believe that your reports are being used for employment or other [Fair Credit Reporting Act] purposes, you and your customers who are using the reports for such purposes must comply with the FCRA," Maneesha Mithal, director of the FTC's Division of Privacy and Identity Protection, wrote in a letter to the companies. "This is true even if you have a disclaimer on your website indicating that your reports should not be used for employment or other FCRA purposes."

The FTC did not determine whether the app companies ran afoul of the law, but the letter warned that the commission "reserves the right to take action against you based on past or future law violations."

UPDATE: The FTC revealed on Tuesday that the companies receiving the letter were Everify, marketer of the Police Records app; InfoPay, marketer of the Criminal Pages app; and Intelligator, marketer of Background Checks, Criminal Records Search, Investigate and Locate Anyone, People Search and Investigator apps.

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