Is Your Background Screening Provider Off-Shoring Sensitive Applicant Information?

In recent years, identity theft has become an enormous problem in the United States. Both state and federal governments have taken steps to prevent the exposure and misuse of personal and identifiable information (PII) to combat identity theft.

Many states have adopted their own legislation pertaining to the handling of this sensitive information. In addition, there are protective measures within 3 federal acts to protect consumers against identity theft; the Gramm-Leach-Bliley Act (GLBA), the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and the Federal Fair Credit Reporting Act (FCRA). Victims of this crime in the US have channels to report incidents, have recourse and resources to assist them in coping with the often serious effects of identity theft.

Unfortunately, these protections do not extend beyond the borders of the United States. While there are countries that have extremely strong privacy protection laws, many of the countries where sensitive consumer data is sent for processing offer little protection or recourse for victims of identity theft. These countries are attractive because they offer a distinct economical advantage: reduced costs and wages for workers who process information. This ultimately means that workers in foreign and potentially impoverished countries may receive the personal and identifiable information of US consumers that could ultimately be used for unlawful acts. And worse, the consumer may not have the protections, recourse or resources available to them in the United States.

Some consumer reporting agencies (background screening companies) have recently explored the economical benefits afforded by utilizing businesses and inexpensive labor in foreign countries to process background checks. There is no requirement of the screening company to notify the consumer or their client that the sensitive information they have entrusted to the screening company may be sent outside of the US. This practice is considered by many in the background screening industry to be irresponsible based on the potential risk to the consumerís personal and identifiable information and contrary to the tenets of the screening industry.

ìThe recent practice of utilizing less expensive labor in foreign countries is a dangerous approach to reducing costsî says Bon Idziak, President of Applicant Insight. ìIt is certainly problematic that the company performing the background check and the consumer are usually unaware that sensitive information is leaving the USî.

Companies who outsource their background screening programs should be aware that this practice exists among some of the most visible screening companies in the US and take steps to mitigate the risk to applicants and employees based on their own privacy and security policies. It is recommended that both the company and the consumer insist upon notification if sensitive information provided by the consumer could be sent outside of the US where no protections may exist.