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Consumer Financial Protection Bureau Settles with Employment Background Screening Company

Washington, D.C. – Today the Consumer Financial Protection Bureau (Bureau) filed a proposed stipulated judgment with Sterling Infosystems, Inc. to resolve allegations that Sterling violated the Fair Credit Reporting Act (FCRA). Sterling is a privately-held Delaware corporation headquartered in New York whose primary business is to prepare background screening reports on individual job applicants to assist employers in employment-making decisions. If entered by the court, the stipulated judgment will require Sterling to pay monetary relief to consumers and a civil money penalty and prevent Sterling from engaging in the allegedly illegal conduct again.

In its complaint, filed in the federal district court in the Southern District of New York, the Bureau claims that Sterling violated the FCRA by failing to employ reasonable procedures to ensure the maximum possible accuracy of the information it included in the consumer reports it prepared. Specifically, the Bureau alleges that Sterling’s procedures created a heightened risk that its consumer reports would include criminal records belonging to another individual with the same name as the applicant. The Bureau also alleges that Sterling had a practice of including “high-risk indicators” in its reports without taking any steps to verify the accuracy of them. These “high risk indicators,” which Sterling obtained from a third party, characterized addresses that the consumer may have lived at as “high risk.”  The Bureau also claims that Sterling violated the FCRA by failing to maintain strict procedures to ensure that public record information that it included in the consumer reports was complete and up to date or notify consumers, at the time that such information was reported, of the fact that public record information was being reported. The Bureau also claims that Sterling violated the FCRA by reporting criminal history information and other adverse information about consumers outside of the allowable reporting period.

If the proposed stipulated judgment is entered by the court, Sterling will be required to pay $6 million in monetary relief to affected consumers and a $2.5 million civil money penalty to the Bureau. The proposed stipulated judgment also includes injunctive relief to prevent the claimed illegal conduct from recurring.

The complaint is available at:

The proposed stipulated final judgment and order is available at:

The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visit