In resolving the first Fair Credit Reporting Act (FCRA) case involving mobile "apps," marketers of mobile applications that compiled and sold criminal record background check reports as job applicant screening tools have agreed to settle Federal Trade Commission (FTC) charges that they operated as consumer reporting agencies (CRAs) without taking consumer protection measures required by the FCRA. The FTC's settlement order, which prohibits the companies involved from future FCRA violations. According to the FTC complaint, the mobile app marketers failed to ensure that the background check information they sold was accurate and would be used only for legally permissible purposes. The FTC also alleged that the companies failed to tell users of their criminal record reports about obligations under the FCRA, including the requirement to notify consumers if an adverse action was taken against them based on a report. As alleged in the complaint, the mobile app marketers used disclaimers stating: That they were not FCRA compliant; That their products were not to be considered screening products for employment, insurance, and credit screening; and That anyone who used their reports for such purposes assumed sole responsibility for FCRA compliance. know more about Home Security Camera Systems. However, according to the FTC's complaint, these disclaimers were not enough to avoid liability under the FCRA because the company advertised and expected that its reports could be used for employment purposes. The FTC settlement order bars the respondents from furnishing a consumer report to anyone they do not have reason to believe has a "permissible purpose" to use the report, failing to take reasonable steps to ensure the maximum possible accuracy of the information conveyed in its reports, and failing to provide users of its reports with information about their obligations under the FCRA. The FTC will publish a description of the consent agreement package in the Federal Register subject to public comment through February 11, 2013 when the FTC will decide whether to make the proposed consent order final. The FTC notes a consent order is for settlement purposes only and does not constitute an admission that the law has been violated.
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