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Question:  What is the difference between having a third-party consumer reporting agency search public records versus directly accessing a database of public records on your own?

Response & Analysis:

The primary difference between using a consumer reporting agency (CRA) and directly accessing a database is the federal Fair Credit Reporting Act (FCRA). The FCRA, which regulates consumer reporting agencies, is designed to protect consumers by ensuring that CRAs have safeguards in place to ensure the accuracy of information and to give consumers the right to dispute and correct any inaccurate or incomplete information. The FCRA also places time limits on how long a CRA can include negative information in a consumer report.

If you are using a CRA to search for records on an applicant, Section 607 of the FCRA requires the CRA to “follow reasonable procedures to assure maximum possible accuracy” of any information reported. This generally requires the CRA to verify that all potential records belong to the subject of a consumer report before those records can be reported to an employer. Further, the CRA is required to have procedures in place to allow a consumer to dispute any information that it reports.

The FCRA also places limitations on what information a CRA can include in any consumer report that it produces. Section 605 of the FCRA generally prohibits a CRA from reporting any bankruptcy records that are older than ten years or any other adverse items of information that are older than seven years. In addition, many states have their own FCRA-type laws that further limit what a CRA can report – primarily in the area of criminal records.

In general, databases of public record information are not covered by the FCRA. In fact, many include specific qualifications that the information in them is not to be used for any FCRA-regulated purpose. Being outside of the FCRA, these databases are not bound by the same mandates on accuracy, they do not have to support consumer-dispute mechanisms and they do not have to adhere to reporting limitations. Some of the providers of these public records databases include www.tlo.com; www.lexisnexis.com; and www.beenverified.com.

So, while these databases may provide more information than what is available from a CRA, users must contend with the accuracy issues. These often appear when records are matched by a name search but no other identifiers, such as date of birth or Social Security number, are available, making it impossible to determine if the records in the database actually belong to the person being searched.

One potential approach for organizations that are required to obtain all possible information is to use a combination of a CRA and a public records database. The information obtained by a CRA can be used for any FCRA purpose such as hiring, promotion or re-assignment while database information can be used for regulatory purposes provided that accuracy issues are taken into consideration.

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