On August 8, 2012, the Federal Trade Commission settled with HireRight Solutions, Inc. (“HireRight”) for failure to comply with certain Fair Credit Reporting Act (“FCRA”) requirements. At first blush, the case may appear to be a simple FCRA matter – the FTC alleged that HireRight functioned as a consumer reporting agency when providing employment screening services to companies, but then failed to take steps to assure the accuracy of those reports and prevented consumers from dispute inaccurate information. Despite initial appearances, however, the case has broader geopolitical implications.
For years, the United States has argued that the FCRA is the foundation of a privacy regime aimed at preventing harm to individuals. The FCRA requires consumer reporting agencies to comply with fair information practice principles, such as accuracy, access and correction, and imposes strong penalties for violations. In addition, FTC enforcement actions establish a basis for consumer private rights of action when companies fail to comply with the Act.