Legal Blog

Some Background Check Databases May Be In Violation Of Federal Law

Author Clark & Noonan, LLC
Posted June 16, 2017
Category Theft and Property Crimes

Wall New Jersey Criminal Defense Attorneys serving Monmouth County, Ocean County, Middlesex County and all surrounding NJ areas.

Posted: October 10, 2013

Databases That Contain Information About Suspected Shoplifters Can Hurt Innocent Job Applicants

Shoplifting results in substantial loss of potential revenue for retailers across the nation, however, not all store merchandise is stolen by customers or the general public.

Retail employees sometimes steal merchandise from their own employers, so much so, that retailers are uniting to help stem the problem by using databases that may help them avoid hiring someone who has even been suspected of shoplifting in the past.

Retailers across the country are contributing information to databases about customers and employees suspected of, or caught stealing merchandise from their stores. There are several companies hosting and offering retailers access to these databases, including First Advantage Corporation.

Retail employers can enter a job applicant’s personal information and scan the database to see if any other retailers have reported problems with the employee, or person applying for a job. These databases have attracted the attention of tens of thousands of retailers as clients, including CVS, Target stores, and Family Dollar, who pay a membership fee for access.

Background check databases are legal in all states, however, the Federal Trade Commission has been handling multiple complaints about shoplifting databases and is currently investigating to ensure that such databases are in compliance with the Fair Credit Reporting Act. These shoplifting databases do not necessarily report on convictions, but also allow retailers to report on their own “findings” independent of the legal process.

Many employers, including most retailers, run some sort of background check on job applicants to check for a criminal record, and they may also check for sex offenses. However, complaints regarding the shoplifting databases seem to pivot around the difficulty people have in disputing information, as well the databases containing false, inaccurate data that can harm a job applicant’s chances of employment. Several complaints also allege false confessions coerced by store management have made their way into at least one database.

LexisNexis has owned and operated at least three companies that offer background check databases on shoplifters (they recently sold one of the companies, Esteem.) According to the New York Times, in March 2013, “LexisNexis agreed last week to pay $13.5 million to settle a class-action suit on behalf of 31,000 people that accused the firm of violating consumer protection laws by selling background checks to debt collectors. The company did not admit wrongdoing.”

Category: Theft and Property Crimes

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