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Accuracy in Employment Credit Checks and Criminal Background Checks Is Critical, But Not Enough

Amy Traub

Are you breathing a sigh of relief, job applicants? If a prospective employer runs a background check prior to hiring you, the chances they’ll falsely learn that you’re an armed robber, “a sex offender who [is] in prison at the time” or something similarly misleading are “less than 10 percent” according to an attorney for the National Association of Background Screening Professionals

That heartening statistic comes courtesy of an investigative report on this morning’s Today show, which finds that flawed background checks are causing innocent people to lose jobs, just as error-ridden credit reports do. Peddling criminal checks and credit reports to employers together simply compounds the opportunities for mistakes that can derail job searches and effectively destroy careers.

High error rates in credit reports and criminal background checks alike could be reduced by industry, of course, but as consumer attorney Jim Francis explains, “they would have to spend money on personnel and instituting procedures, which would carve into their profits.” In the meantime, you’re left with a credit reporting system in which “Americans are left virtually powerless to erase the mistakes” and background check system in which errors may get fixed long after the job in question is lost.

The industry’s lack of accountability for errors cries out for public oversight and regulation – so it’s encouraging that the Consumer Financial Protection Bureau  and Federal Trade Commission are taking action to rein them in.

But as I looked at the Today show’s image of “innocent” Catherine Taylor, the white, middle-aged stay-at-home mother who had her file mixed up with the “other” Catherine Taylor – this one a black woman of the same age who reportedly had repeat drug offenses on her record – it was powerfully clear that the problems with the employment background check and credit check industries go beyond the need for greater accuracy. Are we so certain it would have been just to deny the job to the “other” Catherine Taylor, assuming she was otherwise qualified?

With our criminal justice system profoundly marked by racial bias and personal credit histories shaped by a legacy of discrimination in lending, housing and employment; even error-free credit checks and criminal background checks can be mechanisms that reinforce racial discrimination, ensuring, as the Lawyers’ Committee for Civil Rights Under Law that “old arrests and minor convictions can turn into life sentences of joblessness.”

That’s why it’s critical that the Equal Employment Opportunity Commission has taken action on criminal background checks – not only to ensure their accuracy, but to provide guidance ensuring that they aren’t used in a discriminatory fashion. As I’ve argued before, similar guidance is needed on employment credit checks.