Background-check business booming, and so are errors

SAN FRANCISCO – A clerical error landed Kathleen Casey on the streets.

Out of work two years, her unemployment benefits exhausted, in danger of losing her apartment, Casey applied for a job in the pharmacy of a Boston drugstore. She was offered $11 an hour. All she had to do was pass a background check.

It turned up a 14-count criminal indictment. Kathleen Casey had been charged with larceny in a scam against an elderly man and woman that involved forged checks and fake credit cards.

There was one technicality: The company that ran the background check, First Advantage, had the wrong woman. The rap sheet belonged to Kathleen A. Casey, who lived in another town nearby and was 18 years younger.

The business of background checks is booming. Employers spend at least $2 billion a year to look into the pasts of their prospective employees. They want to make sure they’re not hiring a thief or worse.

But it is a system weakened by the conversion to digital files and compromised by the welter of private companies that profit by amassing public records and selling them to employers. These flaws have devastating consequences.

It is a system in which computers scrape the public files of court systems around the country to retrieve personal data. But it’s also a system in which what they retrieve isn’t checked for errors that would be obvious to human eyes.

It’s a system that can damage reputations and, in a time of precious few job opportunities, rob honest workers of a chance at a new start.

Those are the results of an investigation by the Associated Press that included a review of thousands of pages of court filings and interviews with dozens of court officials, data providers, lawyers, victims and regulators.

“It’s an entirely new frontier,” says Leonard Bennett, a Virginia lawyer who has represented hundreds of plaintiffs alleging they were the victims of inaccurate checks. “They’re making it up as they go along.”

Two decades ago, if a county wanted to update someone’s criminal record, a clerk had to put a piece of paper in a file. And if you wanted to read about someone’s criminal past, you had to walk into a courthouse and thumb through it. Today, half the courts in the United States put criminal records on their public websites.

Digitization was supposed to make criminal records easier to access and easier to update. To protect privacy, laws were passed requiring courts to redact some information, such as birth dates and Social Security numbers, before they put records online. But digitization perpetuates errors.

“There’s very little human judgment,” says Sharon Dietrich, an attorney with Community Legal Services in Philadelphia, a law firm focused on poorer clients. Dietrich represents victims of inaccurate background checks. “They don’t seem to have much incentive to get it right.”

Dietrich says her firm fields about twice as many complaints about inaccurate background checks as it did five years ago.

The mix-ups can start with a mistake entered into the logs of a law enforcement agency or a court file. The biggest culprits, though, are companies that compile databases using public information.

In some instances, their automated formulas misinterpret the information provided them. Other times, records wind up assigned to the wrong people with a common name. And many of the commercial databases don’t perform the updates required to purge offenses that have been wiped from public record.

The industry of providing background checks has been growing to meet the rising demand for the service. In the 1990s, about half of employers said they checked backgrounds. In the decade since Sept. 11, that figure has grown to more than 90 percent, according to the Society for Human Resource Management.

In an effort to prevent bad information from being spread, some courts are trying to block the computer programs that background check companies deploy to scrape data off court websites. The programs not only can misrepresent the official court record but can also hog network resources, bringing websites to a halt.

In the digital age, some states have seen an opportunity to cash in by selling their data to companies. Arizona charges $3,000 per year for a bundle of discs containing all its criminal files. The data includes personal identifiers that aren’t on the website, including driver’s license numbers and partial Social Security numbers.

Other states, exasperated by mounting errors in the data, have stopped offering wholesale subscriptions to their records.

North Carolina, which has been among the most aggressive in ferreting out errors in its customers’ files, stopped selling its criminal records in bulk. It has moved to a system of selling records one at a time.

People rarely know when they are victims of data errors. Employers are required by law to tell job applicants when they’ve been rejected because of negative information in a background check. But many do not.

Dennis Teague was disappointed when he was rejected for a job at the Wisconsin state fair. He was horrified to learn why: A background check showed a 13-page rap sheet loaded with gun and drug crimes. But it wasn’t his record. A cousin had apparently given Teague’s name as his own during an arrest.

Teague sued Wisconsin’s Department of Justice, which furnished the data and prepared the report. The state says it was appropriate to include the cousin’s record, because that kind of information is useful to employers the same way it is useful to law enforcement.

One of Teague’s lawyers, Jeff Myer, said the state is protecting the sale of its lucrative databases. “It’s a big moneymaker, and that’s what it’s all about,” Myer said.