Background Check Wrongly Says Job Seeker is Sex Offender

"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.

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