CFPB Takes Action Against Two of the Largest Employment Background Report Providers


CARCO endeavors to keep our clients informed about regulatory and compliance matters in the pre-employment background screening industry.  In furtherance of that, we are reporting on a recent press release from the Consumer Financial Protection Bureau (CFPB) that announced action taken against two of the industry’s largest background screening report providers for serious inaccuracies in their background reports.  With $13,000,000 in total fines, this serves as another reminder of the importance of accuracy in background screenings and amplifies the reasons behind CARCO’s strict adherence to its principals of accurate information and compliant processes.


The specific findings from the CFPB were that the companies: 1) failed to take basic steps to assure accuracy and 2) included impermissible information on their background reports.  Pursuant to its authority under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB assessed $10.5 million in relief to harmed individuals and a civil monetary penalty of $2.5 million. 


We are reaching out to you now to explain CARCO’s current practices and policies in order to assure our clients that CARCO is an industry leader in accuracy and compliance and puts forth great effort to keep ourselves and our clients out of regulatory harm’s way while at the same time protecting the rights of your candidates and employees.


Some of the measures that make CARCO an industry leader:


  • Before any adverse criminal record is reported to our clients it must first go through 5 levels of verification and quality control in order to ensure the accuracy of the report. 
  • All records are verified with documentation from the source repository, we do not report non-perfected database information.
  • CARCO reviews every record in an effort to match identifiers including full name with middle name, addresses, social security numbers when available and date of birth.  If the appropriate identifiers cannot be matched, the record is not reported.
  • We maintain an up-to-date database of local and state laws to ensure the information we are publishing is in compliance in each jurisdiction.
  • CARCO has a fully automated dispute process available for our clients and their candidates which is audit proof and provides a simple, easy to use format for filing disputes.
  • CARCO has a formal dispute review process which includes weekly meetings of our Board of Consumer Protection.  This board is comprised of executives and research team members who review every dispute filed by candidates and manage the re-review process of those investigations and make decisions about whether to republish the information as is or with corrections when necessary.


This heightened level of diligence and concern for accuracy and compliance takes effort and in some cases a small amount of extra time but because of it CARCO has an extremely low dispute rate.  A recent review of the past 6 months of research activity covering all CARCO clients showed that only .002% of our research findings were disputed by candidates and of those records disputed less than half resulted in any change to the information reported.  Many times those changes were as a result of CARCO working with candidates to assist them in correcting information at the source repository that they may not have even known existed.  In situations like this, after our assistance we are able to republish the information with the new, corrected information and assist the candidates with clearing their records and obtaining employment. 


CARCO takes compliance very seriously.  We are driven by the goal of providing accurate information that our clients can feel confident in using when making hiring decisions.  Industry news like the attached only reconfirms our belief in this goal and rededicates us to the mission of providing accurate, compliant reports to our clients.


If you have any questions about the CFPB’s action or CARCO’s processes, please feel free to reach out to your Client Service Representative.



CARCO Group, Inc. Announces Continued Accreditation with the Background Screening Agency Accreditation Program

NAPBS Accredited Logo May 2013  CARCO Group, Inc., a leading HR technology and background screening company, is proud to announce that it has achieved reaccreditation with the Background Screening Agency Accreditation Program, a distinction earned by only 14% of NAPBS member background screening companies.   


“The CARCO team is proud and honored to have once again earned the coveted NAPBS Accreditation through our documented high standards as verified by independent onsite audit.  This recognition is one measure of our continued commitment to excellence for our clients, their employees and candidates,” said Fred Giles, Senior Vice President of Strategic Initiatives for CARCO Group, Inc.


The National Association of Professional Background Screeners’ accreditation program is for Consumer Reporting Agencies (CRA’s) located in the U.S. Governed by a strict and thorough set of professional standards, the Background Screening Agency Accreditation Program (BSAAP) has become a widely recognized seal of approval that brings national recognition to an employment background screening-affiliated organization for its commitment to excellence, accountability, high professional standards and continued institutional improvement.



About CARCO Group, Inc.: 

CARCO is an HR technology and paperless workflow solutions company. Started in 1977 as a background screening company, CARCO has evolved to become a full-service HR partner, helping clients manage their new hire process in standalone solutions or integrated with their ATS. CARCO’s Onboarding Solution eliminates paper processes and ensures efficient and compliant hiring. Full-service offerings include background screening globally, electronic I-9/E-Verify, vendor screening, drug testing, and fingerprinting services. Through its technology, CARCO is able to customize unique programs and quickly respond to changing customer needs.

Big Lots Stores Hit With a Class Action Suit for FCRA Violations

big-lots-logo    On November 2nd, a plaintiff filed a class action against discount retail chain Big Lots Stores, Inc.  for alleged violations of the Fair Credit Reporting Act over its background check procedures. According to the complaint, the plaintiff alleges that Big Lots “systemically” violated the FCRA’s standalone background check disclosure requirement. According to the plaintiff, Big Lots’ disclosure form contained extraneous information, a violation of the FCRA.


The extraneous information, according to the plaintiff, included a provision stating how the applicant  “understands that all employment decisions are based on legitimate non-discriminatory reasons.”


Specifically, the plaintiff states that the “defendant repeatedly and routinely uses the same unlawful document with all of its employees on whom it procured consumer reports or otherwise failed to provide them with the required stand-alone disclosure.”


Big Lots Stores joins a long list of other companies that are fighting class action suits for FCRA Violations (, Chipotle Mexican Grill, Hertz, Avis, Universal Studios, and BMW, just to name a few).  In this litigious environment, it is more important than ever that HR managers ensure that their hiring processes are FCRA compliant.


Aaron Abel v. Big Lots Stores, Inc., No. 151100286 (Philadelphia County Crt. of Common Pleas, Nov. 4, 2015)


President Obama “Bans the Box” on Federal Hiring

banthebox  In a move to help ex-prisoners find gainful employment and stay out of prison, President Obama has signed an executive order to “ban the box” from federal job applications. This prohibits federal employers from asking applicants about their criminal history until later in the hiring process when a background check can be conducted.  This executive order is limited to federal employers only – not private employers or federal contractors.

“This action will better ensure that applicants from all segments of society, including those with prior criminal histories, receive a fair opportunity to compete for Federal employment,” an official statement from White House explains.

While this move will not guarantee that a person with a record will get hired, it will at least offer people with records the chance to demonstrate that they are strong candidates, rather than being immediately dismissed. It’s a step in the right direction.

Screening out applicants with a criminal history discounts a significant portion of the population. The National Employment Law Project (NELP), estimates that 70 million people in the U.S. have an arrest or conviction record. “There’s a deep stigma attached to having a record,” says Michelle Rodriguez, senior staff attorney at NELP. When the criminal history question is delayed, it can be evaluated in relation to the candidate’s ability to do the job, rather than establish bias from the beginning, she says.

The federal ban the box order  joins nineteen states, including California, New York and Hawaii, which have passed laws that ban the criminal history box for public, and in some states, private, employers.  Click here to view CARCO’s latest listing of ban the box states and policies.