Am I Over-reacting?

[MACKAY]

This article I found touches on what you are talking about. My employeer uses this service.

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http://articles.moneycentral.msn.com...obHistory.aspx

The next time you apply for a loan or a new job, a lender or prospective employer might go online to access a database instead of calling your human resources department to verify your employment and income.

In most cases, they'll contact a St. Louis company called Talx, which has developed a service called The Work Number.

Companies, government agencies and creditors, such as credit card companies and mortgage lenders, have been using The Work Number for almost a decade, tapping into a database of about 165 million to 170 million individual records (an employee has a separate record for each employer) covering roughly a third of the U.S. work force, says Janet Ford, vice president of Talx, a subsidiary of credit bureau Equifax.

Employers use Talx to handle salary and employment verifications and, in turn, share their payroll information and often several years' worth of payroll records. Employees can challenge the accuracy of any information.

Participating companies submit payroll information every time they process paychecks, Ford says. "So the data is as fresh as the last time they ran payroll," she says.

A company has to go through a credentialing process before it can access the database, says Ford, who adds that the majority of users are businesses attempting to grant credit or government agencies attempting to grant benefits.

Employers pay a fee for Talx to store the data and to respond to employment and salary inquiries. They can also elect to receive a monthly report with the Social Security numbers of their own employees whose records were accessed, the date of the request and what type of records (salary or employment history) were viewed, says Ford. But employers are never told who is making the request or why, she says.

Companies, including would-be creditors, that make inquiries pay to access the data, which costs from $12.50 to $31 per employee, depending on the number and type of records sought, Ford says. To access salary information, companies need the employee's permission.

Employment verification data include the company name, the employee's job title, whether the employee is active or inactive, the start date, the most recent hire date and the total length of time with the company, Ford says.

Salary inquiries include the same information, along with pay rate and frequency, year-to-date earnings and two years' wages, she says. To access a work history, a company must provide the employee's Social Security number and a legitimate reason for the inquiry.

"We are a conduit to efficiently and electronically provide this information to verifiers who need it from employers who have it," Ford says.

What about security?
Some consumer advocates and privacy experts worry about the security of databases storing personal financial information.

A database like The Work Number that uses online interaction can be "a significant convenience for employers and employees," says Peter Swire, a law professor at Ohio State University and senior fellow at the Center for American Progress, a Washington, D.C., think tank.


At the same time, "the size of the database makes it a big, new target," he says. Besides the risks of insider abuse and identity theft, he says, "it's also a tempting target for government investigations and discovery in lawsuits."

"The first rule of databases is, 'If you build it, they will come,'" Swire says.

And a Social Security number isn't the big secret a lot of people assume it is, he says. "For millions of Americans, their Social Security number is up on the Web. So using a Social Security number as a 'secret' is bad security."

Still, online and electronic systems "for better or for worse, make background checks easier," Swire says.

As for the records themselves, "I look at it as a reality of our age," says Evan Hendricks, the author of "Credit Scores & Credit Reports" and publisher of the Privacy Times newsletter. "This is straightforward information showing that you had the job and what it is."

At the same time, he says, "there are dangers: accuracy, data security, hacking or authorized users looking for an unauthorized purpose."

Talx has taken a number of precautions to prevent those problems, says Ford. "We employ the strictest standards with regard to security."

The company will not sell repackaged data on identifiable individuals, Ford says.

"We do not sell it to anybody to use for marketing," she says. Talx's agreements with employers "allow for data to be used for demographics," but only after records have been stripped of any personal information, such as names and Social Security numbers, she adds.

How to check your Work Number
Talx abides by the Fair Credit Reporting Act, Ford says. That means you can request a free copy of your Work Number records every year. That file also will tell you who has been looking at your information. To get your files, you can print out a request form and mail it in or call 1-866-604-6570.
Ford says the number of consumer disputes is "very small" despite more than 600,000 record checks each month. The company has had a dispute process in place for a little more than a year, and in that time it has had about 150 disputes, she says

An employee can dispute information, and the company will investigate by contacting the employer that supplied the data. During the investigation, which is completed within 30 days, the company won't allow access to the disputed information.

If the employer reports that the information is inaccurate, it is changed, and the employee is notified. The employee also can request that the corrected information be forwarded to companies that have recently viewed the inaccurate information.

If the employer reports that the information is correct, the employee is notified and has the option of adding a note to the file explaining the discrepancy.

If the employer doesn't respond, the company adds a notation to the file stating the employee's concerns.


Corrections can be problematic for current and former employees. First, a job seeker might fear tipping off a current employer. Second, former employers may not be willing or able (if the company is no longer in business) to correct past mistakes.

In the current dispute system, it appears that employers have the final word, Swire says. "But as these databases become so important to individuals, it's important to have effective consumer redress."
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