IRVINE, Calif. -- An employment background screening company that provides reports to companies nationwide is paying $2.6 million to settle Federal Trade Commission charges it violated the Fair Credit Reporting Act.

According to the FTC, the company failed to use reasonable procedures to assure the maximum possible accuracy of information it provided, failed to give consumers copies of its reports, and failed to reinvestigate consumer disputes, as required by law.

The case against HireRight Solutions Inc. represents the first time the FTC has charged an employment background screening firm with violating the Fair Credit Reporting Act. The FTC action is seen as sending a message to the industry to clean up its act. There have been calls for the industry to be federally regulated.

Under the settlement, the company also is barred from continuing its questionable practices.

As a consumer reporting agency, HireRight Solutions provides background reports that contain information about prospective and current employees. Its reports are supposed to help thousands of employers make decisions about hiring and other employment-related issues.

Under the Fair Credit Reporting Act, the company's reports qualify as "consumer reports." They contain public-record information, including the individuals criminal history.

The FTC said that in many cases, when it provided consumer reports to employers, HireRight Solutions failed to take reasonable steps to assure the information in the reports was current and reflected updates, such as the expungement of criminal records. Because of this, the FTC charged, employers sometimes received information that incorrectly listed criminal convictions on individuals records.

In addition, according to the FTC's complaint, HireRight Solutions failed to follow reasonable procedures to prevent the same criminal offense information from being included in a consumer report multiple times, failed to follow reasonable procedures to prevent obviously inaccurate information from being provided to employers, and in numerous cases even included the records of the wrong person. The FTC alleged that these failures led to consumers being denied employment or other employment-related benefits.

Under the Fair Credit Reporting Act, consumer reporting agencies must allow consumers to access their own information and dispute any inaccuracies.

In numerous instances, said the FTC, HireRight Solutions failed to comply with Fair Credit Reporting Act requirements. This includes failing to conduct investigations of disputed items in a consumer's file after being notified of a dispute, requiring consumers who wanted to dispute information in their file to have a copy of the report before the company would start a reinvestigation, and telling consumers who did not have a copy of their report to request one before they would reinvestigate, delaying the dispute process and making it more difficult.

In addition, according to the FTC, HireRight Solutions closed complaint investigations without providing written notice of the results to consumers, as required.

Finally, the complaint alleges that HireRight Solutions failed to provide consumers with written notification that it had reported public record information about them to employers when it was being reported, as the FCRA requires.

In addition to the $2.6 million civil penalty, the settlement prohibits HireRight Solutions from engaging in a long list of prohibited activities.