Two of the US’ largest employment background check providers must pay $13.0 million for failing to ensure their background checks did not contain inaccuracies, the Consumer Financial Protection Bureau announced Thursday.

Serious inaccuracies reported by General Information Services and its affiliate, backgroundchecks.com Inc. potentially affected consumers’ eligibility for employment and caused harm to their reputations, according to the agency.

The $13.0 million includes $10.5 million in relief to consumers and a $2.5 million civil penalty.

“General Information Services and its affiliate failed to take basic steps to provide accurate background screening reports to employers about job applicants,” Richard Cordray, Consumer Financial Protection Bureau director, said. “Today we are holding two of the largest companies in this market accountable for cleaning up the quality of their reports.”

General Information Services and backgroundchecks.com sell more than 10 million reports on job applicants to employers each year. The reports include criminal history information and data from civil records. General Information Services is based in Chapin, SC, and has been in operation since 1966. And backgroundchecks.com is based in Dallas; it has been in operations since 1999.

In a statement, the companies said: “Based on the companies’ analysis of the weaknesses alleged in the consent order and all governing law and regulatory guidance, the companies believe that they complied with the Fair Credit Reporting Act’s requirement to use reasonable procedures to ensure maximum possible accuracy in creating background reports.”

They continued: “Regardless, the companies remain committed to the highest achievable levels of accuracy in their reports and acknowledge that every background screening agency must engage in continuous improvement. Therefore, the companies take the bureau’s allegations very seriously and have agreed to the terms that the order imposes”

Problems the Consumer Financial Protection Bureau found include:

• The firms did not use basic procedures for matching public records with the correct person. For example, General Information Services did not require employers to provide consumers’ middle names and neither firm had a written policy for researching consumers with common names. General Information Services also failed to use an audit process to adequately test the accuracy of reports. And between 2010 and 2014, nearly 70% of criminal history disputes consumers filed with General Information Services resulted in a change or correction to the information. As a result, the company provided prospective employers with inaccurate information that included criminal records attached to the wrong consumers, dismissed or expunged records and misdemeanors reported as felonies.
• Impermissible information was included in reports. The agency found the companies did not take measures to prevent nonreportable civil suit and civil judgment information information older than seven years from being illegally included in reports.

Under terms of the agency’s order, the firms must pay $10.5 million in relief to consumers ($1,000 per consumer), pay a civil penalty of $2.5 million, revise their compliance procedures, retain an independent consultant to review their policies and procedures, and develop a comprehensive audit program.