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Errors in background checks can be costly

| Tuesday, Nov. 20, 2012, 6:16 p.m.

Darlene T. Martinez was grateful to be offered a housekeeping job at a local hospital soon after the Progressive Group of Insurance Cos. closed part of a call center where she had worked.

This was in early 2011, in a much weaker economy. Although the position would mean a cut in pay, it was steady work. Besides, the benefits were great, she said.

“The idea of getting a job right away was thrilling,” she said.

All that was left was a criminal background check, a now-standard step in the hiring process. Martinez, 57, doesn't have a criminal record, so she didn't have any reason to worry.

But she believes a faulty background check cost her the job.

Somehow, Darlene T. Martinez was confused with Darlene Foster Ramirez, who was found guilty in 2009 of dangerous-drug possession in Navajo County. The hospital rescinded the job offer, and Martinez was left scrambling to remove another person's felony from her record and find a new job.

The case highlights questions about the accuracy of background checks, which legal experts say can be filled with errors because of incomplete databases and confused identities. These errors can be difficult to fix, costing applicants job opportunities and disrupting livelihoods.

Martinez filed a lawsuit in U.S. District Court this fall against the Phoenix-based company that did the search, Universal Background Screening, alleging that it failed to notify her about the damaging report and that it didn't follow the necessary procedures to ensure accuracy. In addition to different last names, Martinez and Ramirez also have different birthdays.

“The only thing that was the same is her first name,” said lawyer Paul B. Mengedoth, who is representing Martinez.

The suit seeks undetermined damages for violating the federal Fair Credit Reporting Act. Mengedoth said Universal Background Screening was negligent because of its delay in fixing the error after Martinez notified the company about it.

“They indicate on the report that they verified by Social Security and date of birth, both of which we've been able to confirm are not matching,” he said. “How much does someone have to go through to prove they are not a felon?”

Universal Background Screening has denied any wrongdoing, saying that it rarely makes mistakes and that the company followed all necessary guidelines and protocols to ensure accuracy.

Citing the pending case in federal court, company officials wouldn't speak about details.

But Kevin Olson, the company's chairman and chief executive officer, said his company did nothing wrong. Universal Background Screening is known for its accuracy with only two cases in 10 years going to court. (The second one is in Pennsylvania.) He said he expects to prevail in the litigation.

“We take a significant amount of cost and effort to make sure that mistakes don't happen,” he said. “It really is what we are known for.”

Regardless of how the case plays out, it highlights an increasingly common issue in the hiring process.

As criminal records and online databases have become more accessible with the Internet, background screenings have proliferated.

A recent survey by the Society for Human Resource Management indicated that about two-thirds of employers conduct criminal background checks on all job candidates. An array of companies, which don't have to be licensed, offer the service. Searches, though, vary in accuracy. An April report published by the National Consumer Law Center found that many databases are incomplete or include outdated case information.

“It happens a lot,” said Zachary Kramer, who teaches employment law at Arizona State University. “The information they have is either not fresh or incomplete.”

This summer, the Federal Trade Commission penalized California-based HireRight, one of the largest firms in the background-screening field, fining the company $2.6 million for failing to use “reasonable procedures to assure the maximum possible accuracy.”

“A background check is supported by data,” Kramer said. “And when the data isn't right, it's an incredible hassle for everyone to try to correct the data.”

Kramer said common names are often confused. Although he wouldn't comment on Martinez's case, he said lawsuits such as hers “can encourage these background-check companies to do a better job.”

It's unclear just how Martinez was confused with Ramirez. Paperwork Mengedoth provided shows that Universal Background Screening searched “Darlene T. Martinez” as well as “Darlene Martinez Ramirez,” which is a married name she no longer uses. Somehow, that name linked her to Darlene Foster Ramirez.

Under federal law, consumers such as Martinez are supposed to be notified in writing that a background check with a criminal record has been reported. If that consumer wants to dispute that report, the company that did the background check has 30 days to investigate and ensure the information is accurate.

In her lawsuit, Martinez alleges that Universal Background Screening did neither of those things. She said she learned about the mistake from the hospital.

After that, she said she contacted Universal Background Screening numerous times in April and May, but it took about three weeks to get her record corrected.

“At first, I cried for about two days because I was so upset by it and distraught,” Martinez said. “Once I picked myself up and dusted my boots off, I said, ‘OK, I want to know how this is happening. What's going on? I want this off my record.' “

Olson denies the allegations. He said his company followed best practices and typically resolves these kinds of disputes within days.

The false report was on her record for a few weeks, but Martinez said its effects lasted much longer: It took her months to find a sales job with a local construction firm.

During that time between jobs, she was forced to file for unemployment benefits.

“This turned over my life,” she said. “It took away my livelihood in an already hard economy.”

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