Background Check Wrongly Says Job Seeker is Sex Offender

Samuel Jackson thought his job offer from Optics Planet was a done deal -- but then a routine background check gone awry surprised the company and Jackson with a detail even he didn't know: his name appeared on national list of registered sex offenders.

Jackson, 27, alleges in a suit filed in U.S. district court last week that the consumer reporting agency that ran his background check, Infotrack Information Services, carelessly mixed him up with people who shared his name and might have cost him and countless others potential jobs.

"It's alarming if you think about it because you wonder how many common names go through this," Jackson told ABC News.

Sharon Dietrich, an attorney with Community Legal Resources of Philadelphia, said the answer is many, many people with common names that go through similar battles with background check companies to get their names cleared.

"We see lots and lots of examples of background checks done wrong," said Dietrich, who noted that more than 80 percent of companies now use background checks to screen potential employees. "And for some people, that can mean the difference between working and not working."

When Consumer Reporting Agencies Get it Wrong

In October 2010, Jackson was offered a job as a live chat response specialist for Optics Planet, an Illionois-based online catalog for binoculars, camera lenses and other optical equipment. The company then contracted Infotrack to run a background track, and Infotrack returned information tying Jackson to seven "possible matches" from the national sex offender registry, according to the suit.

Optics Planet later reneged the job offer, which Jackson suspects is because of the faulty criminal reporting, according to his lawyer, Christopher Wilmes. Optics Planet would not confirm to Jackson that the criminal report had any bearing on their decision to rescind the offer, and the company did not return calls for comment from ABC News.

The background check misidentified Jackson, who is a white male in his twenties, as a black male in his fifties who had been convicted of sex crimes in states where Jackson has never lived.

"It seemed like a fishing expedition," Jackson said. "It was outlandish. It's absurd that I would be tied in to these heinous acts."

Jackson is suing the company for practices that violate the Fair Credit Reporting Act.

He claims Infotrack never bothered to verify any of the information found in the sex offender database -- not even his birthday. The 28-year-old was born in 1983; one of the sex offenders he was accused of being committed his crime in 1987, when Jackson was 3 years old.

Another match for the name "Samuel Jackson" returned a Virginia man convicted of aggravated sexual battery and sentenced to life in prison, where he remains today. And yet the match was included in the report.

Wilmes cites these as examples of the "grossly inaccurate" reporting by Infotrack.

Violations of the Fair Credit Reporting Act

According to the Fair Credit Reporting Act, consumer reporting agencies are required to follow reasonable procedures to assure accuracy and to notify individuals when a report may adversely affect their job application. Jackson claims he never received such notification.

When Jackson complained to Infotrack, the company told him mix-ups happen all the time, and people complain to them often about it, according to the suit.

"People are getting background checks that may or may not be accurate, may or may not be compliant with the law, they report information they're not supposed to under the law," Dietrich said.

Calls for Regulating the Background Check Industry

Like Jackson, individuals wronged by consumer reporting agencies can try and contact the company to straighten out the reports, or take legal action against them, but few do, Dietrich said.

"People can get damages from the companies, but unfortunately that happens in a small number of cases. Most people don't have access to lawyers. Most people are just happy to get the reports fixed, because filing disputes doesn't even necessarily work," she said.

"Any company like this that's totally unregulated, they can ruin your reputation," said Sally Greenberg, executive director of the National Consumer League. "When they don't have the credentials or reputation or integrity to be carrying out these inquires, that's really troublesome."

Dietrich, in coordination with the National Employment Law Project, recently submitted a filing with the Consumer Financial Protection Bureau encouraging them to begin regulating background check companies.

"One of the things we've been doing is to urge the CFPB to give some priority to this," Dietrich said. "The big agencies like Lexis Nexis that do more things are covered, but it's certainly true that the law has written out smaller companies that do only background checks, and there are all these widespread problems."

The CFPB referred ABC News to the Federal Trade Commission, which oversees Fair Credit Reporting Act. A spokeswoman for the FTC said that the agency has pursued a number of cases against consumer reporting agencies that have failed to meet FCRA requirements.

Consumers Union, a non-profit watchdog group that publishes Consumer Reports, said that consumer rating agencies need closer monitoring by the government because of their tendency to "unfairly use consumers' data to draw potentially harmful and unreliable conclusions," according to a statement released by the group last month. The group also wrote a letter to Congress alerting them to the risks of these companies.

Margaret Hendron, the Director of Operations for Infotrack, declined to comment on the case. The Infotrack website confirms that its sex offender checks are "inherently incomplete" and must be verified with local criminal reports.