Increasingly, compliance at the Consumer Reporting Agency (CRA) level requires a partnership with a wholesale public records research provider who understands the compliance environment CRAs face. For insight, and to learn how Wholesale Screening Solutions supports CRAs in meeting their compliance requirements, we spoke to Vince Pascarella and Gregg Hyde. Vince is Wholesale Screening Solutions’ Executive Vice President and General Counsel. Gregg is the Director of Compliance for Wholesale.
Q. How would you describe the current landscape of compliance in which CRAs operate?
A. The landscape today is more litigious, more highly-regulated, and certainly more complex than ever before. As recently as 5 years ago, the industry generally erred on the side of “over-reporting” information (defined as providing as much information as the law allowed and then letting the employer sort it out).
Now, CRAs find themselves in an environment where there can be serious consequences for the CRA and its employer-customers for over reporting potentially adverse information. CRAs are faced with an emboldened plaintiff’s bar that sees a potential payday in Federal Fair Credit Reporting Act (FCRA) litigation and an aggressive Consumer Financial Protection Bureau (CFPB) with the resources and budget to enforce the FCRA that the Federal Trade Commission (FTC) didn’t have previously. As a result, CRAs have become increasingly conservative about what information is researched, increasingly erring on the side of “under-reporting” information (defined as providing more limited information to the employer). In this climate, CRAs have rightly come to view their and their public records research providers’ compliance as an even more critical component to their overall business strategy.
Q. What is the value of compliance?
A. The value of compliance might seem obvious. When you’re compliant, you can avoid litigation, fines, penalties, costs, and damage to people, brand, and profits. Regardless of what the law says, public record research providers and CRAs have an obligation to do right by consumers every day. For example, when we complete our data research and get it right, the CRA gets it right, the employer gets it right, and the consumer is well-served.
When it comes to the competitiveness of acquiring quality job candidates in the marketplace, getting it right really matters to the employer. Employers and job candidates are vetting each other. When a mistake is made in the background check, the candidate is not going to care who made the mistake. It’s going to reflect poorly on the employer, which will, in turn, reflect poorly on the CRA. If you’re a CRA and using a subpar public record research provider to save a nickel per search, that can eventually backfire and put your relationship with your employer/customer and the overall reputation of your brand, at risk.
Q. How do data providers such as Wholesale Screening Solutions impact a CRA’s compliance efforts?
A. CRAs expect their public record research providers to be compliant. Compliance, in this case, means that the provider is supplying accurate information in accordance with the CRA’s requirements. In other words, a public record researcher’s compliance is about contractual, policy, and procedural compliance rather than the type of statutory legal compliance CRAs face. Wholesale Screening Solutions’ compliance, or ability to consistently deliver accurate information, directly impacts our CRA-customers’ legal compliance obligations.
In the case of mitigating the risk of litigation, our processes for retrieving accurate public record information becomes the de facto processes of our CRA-customer, and since the CRA is not in direct control of what we or any other of their public record researchers do each day, the CRA’s expectation is that their providers deliver consistent information the way they require it to be delivered.
Public record research providers must be increasingly sophisticated and must clearly and consistently document their processes and procedures so the CRA can rely on their provider. The rigor used by the CRA’s provider in getting this research done accurately becomes exceedingly important for the CRA in the event of legal action.
At Wholesale Screening Solutions, compliance and quality are our priority, and they are woven into the fabric of the company in very tangible ways. Our attention to compliance and quality, and the well-documented policies and procedures that go into achieving compliance and quality, support the compliance requirements and legal defense strategies of our CRA-customers.
In case you missed last month’s Q&A on Wholesale’s approach to quality, check out our interview with Director of Quality, Mark Perka, here: Building a Culture of Quality.