Tag Archives: criminal record

Why Credit Monitoring Isn’t Enough

Having credit monitoring instead of identity monitoring is like putting a security system in the elevator but not in the whole office building. The scope of security is limited and leaves the workforce vulnerable. Thus, understanding how monitoring programs differ, how they work and why it matters is critical for safeguarding your identity.

Why should you care?

Victims of identity theft deal with increased stress, hours of work rebuilding their reputation and recovering from major financial losses; all of which have major consequences in other areas of life – like decreased productivity and performance on the job.

Given the statistics, if you haven’t dealt with the crime in some capacity, it’s only a matter of time.

The good news is that arming yourself with credit monitoring and identity monitoring gives you a better chance of stopping identity theft before it gets out of hand, thereby diminishing the negative effects that follow.

What is credit monitoring? How does it work?

There’s a broad range of credit monitoring services available in today’s market, and each program varies. Credit monitoring is a reactive approach to identity theft that involves checking credit reports for fraudulent activity. Because a credit report shows past activity, it will only reveal fraud or theft that has already affected the victim. That’s why it’s like only having security in the elevator: Once you realize the culprit is there, he has already infiltrated the building.

Credit monitoring programs will pull a member’s report, often quarterly or annually, from any number of the three major credit bureaus and make it visible to the member. On top of that, programs watch credit reports, transactions and activity for changes that could be criminal.

Another aspect of credit monitoring is resolution and recovery assistance, but, again, the levels of assistance vary from product to product. For instance, credit monitoring services will alert a member if they find fraudulent activity on the credit report(s), but some services don’t inform the credit bureaus on behalf of the member.

What is identity monitoring? How does it work?

Identity monitoring takes a more active approach. It not only focuses on credit reports but broadens the security sweep to account for name, birth date, address, email, driver’s license, Social Security number and more. Think of it as a security system for the whole office building, with security officers at every door and window.

Top-notch identity monitoring programs will check national databases for suspicious activity, watch out for questionable transactions and ultimately try to keep the member informed with real-time alerts about a data breach or fraudulent act. Touch points could even include scanning criminal record databases, sex offender registries and public records.

Identity monitoring can also give people peace of mind about their biggest worries: More than 70% of consumers are concerned about their Social Security number, credit card, insurance and driver’s license number, while less than 60% are concerned about their credit score and transaction history. People want more protection than what’s offered by credit monitoring alone, and identity monitoring is the answer.

What is the difference?

One major difference between identity monitoring and credit monitoring is accuracy. The all-inclusive nature of identity monitoring allows for a more accurate assessment of susceptibility to identity theft. For example, credit monitoring may not detect problems like tax fraud or medical identity theft because credit reports don’t necessarily show those types of information. Because identity monitoring is more robust, it can discover anomalies and provide protection for more than the financial aspects covered by credit monitoring.

Simply put, identity monitoring provides more coverage than credit monitoring.

For more information, visit clcidprotect.com.

When Are Background Checks Not Allowed?

The Equal Employment Opportunity Commission (EEOC) has been quite active in challenging employers’ use of criminal background and credit history checks during hiring. There is still significant uncertainty as to the current standards and law about the checks of criminal and credit history. The lack solid guidance makes it difficult for employers to determine how to evaluate their current use of this information, as well as to understand the legal pitfalls and hurdles that the EEOC has placed in front of them.

EEOC Directives

The recent activity emanates from the EEOC’s recent directive and key priority (as per its December 2012 Strategic Enforcement Plan (SEP)) to eliminate hiring barriers. This priority includes challenges to policies and practices that exclude applicants based on criminal history or credit check. The EEOC has a keen interest in this area, as it believes that criminal/credit checks have a disparate impact on African American and Hispanic applicants. As the EEOC pursues the directive, expect the EEOC to scrutinize failure-to-hire claims where a criminal history or background check was conducted. Even if the background check was “facially neutral” and was uniformly given to all applicants, the EEOC may investigate to determine if the check had a “discriminatory effect” on certain applicant(s).

The EEOC asserts that criminal background checks must be “job-related” and “consistent with business necessity.” Employers are advised to consider: (1) the nature and gravity of the offense or conduct; (2) the time that has passed since the offense, conduct or completion of the sentence; and (3) the nature of the job held or sought. The EEOC stresses the need for an “individualized assessment” before excluding an applicant based on a criminal or credit record.

Local/State/Federal Laws

Employers face additional legal hurdles regarding hiring practices because of recent local and state legislative developments. These laws are commonly referred to as “ban the box” (i.e., restrictions on the use of criminal history in hiring and employment decisions). Making matters even more difficult, employers have also been subject to a surge in class action litigation under the Fair Credit Reporting Act (FCRA). The FCRA regulates the use of and gathering of criminal histories through third-party consumer reporting agencies with respect to conducting background checks on applicants or employees.

Legal Actions

In pursuit of its directive, the EEOC has filed several large-scale lawsuits against employers. We expect that the EEOC will continue to file similar lawsuits throughout 2015 and beyond. Most have been brought as failure-to-hire claims. For example, an African-American woman brought a claim alleging that she was discriminated against based on her credit history. This claim started out as a single plaintiff action, but, after the EEOC conducted its initial investigation, the EEOC dramatically expanded the scope of the initial charge, alleging that the employer was engaging in a “pattern and practice of unlawful discrimination” against: (1) African-American applicants by using poor credit history as a hiring criterion and (2) African-American, Hispanic and white male applicants by using criminal history as a hiring criterion.

Reasonable employers complain that the EEOC has placed employers in a Catch 22. Employers have to choose between ignoring criminal history and credit background, exposing themselves to potential liability for criminal and fraudulent acts committed by employees or to an EEOC lawsuit for having used this information in a discriminatory way.

Takeaway for Employers

Claims involving criminal background checks and credit checks are an EEOC priority. At this time, employers have little guidance from the courts or the EEOC as to exactly what “job-related” and “consistent with business necessity” mean and just how closely a past criminal conviction has to correspond with the duties of a particular job for an employer to legally deny employment to an applicant. Moreover, employers continue to witness expanding restrictions dealing with criminal history at the state and local level based on ban-the-box legislation, as well as with an increasing number of class action lawsuits involving background checks as required under the Fair Credit Reporting Act.

Employers are encouraged to work closely with legal counsel as to what they should and should not ask on applicants as well as how and when they can use background information they obtain. Based on this evolving area of the law, we additionally recommend that employers purchase a robust EPL policy that will defend them in the event that the EEOC or a well-skilled plaintiff’s counsel pursues a claim against them for discrimination, or for failure to hire based on criminal or credit background checks.