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A mutual solution.

THE FAIR CREDIT REPORTING ACT (FCRA), which was passed in 1970, dramatically limited a business's ability to check the employment history of prospective employees. Consumer reporting agencies, known as stores mutual associations, were created to solve the problem. These associations continue to provide security managers with an important piece to the puzzle.

Stores mutual associations sprouted up all over the country. While they vary in size, cost, and the geographic locations they serve, all conduct business in the same general manner. Members pay an annual fee. These fees vary widely among associations and are usually graduated according to the size of the company. Stores Protective Association in California has the lowest fee, with a flat rate of $120 regardless of company size. Texas Mutual Association, which charges $15,000 for large companies, is the most expensive.

Membership in an association entitles companies to conduct inquiries on prospective employees. An additional fee is charged per inquiry. It is usually between $1 to $2.

Members are required to submit information on dishonest employees, which is entered into the association's data bank and retained for seven years. After seven years, the information, by law, must be purged. Associations also accept information on shoplifters. No distinction is made between the two categories when disseminating information to inquirers. When a member decides not to hire an individual based on the information an association supplies, the member is required by law to notify the individual of the association.

To join an association is often as simple as matching the region a company wants to cover with the association that monitors records in that region.

A company should request a current membership list, a copy of the articles of incorporation, and proof of insurance in addition to finding out the size of the data bank and how long the association has been in business. SMA in Laurel, for example, maintains a data bank of more than 70,000 individual profiles.

Many associations will conduct a free search of an entire company population when a company joins. Normally, all the company has to do is furnish the association with an alphabetic list, such as a payroll computer printout. Companies should also check with their liability insurance carrier to determine if membership in the association qualifies them for a rate reduction.

Stores mutual associations are just one more tool security managers can use to construct a reliable interview process. Membership in an association could be a valuable investment.

George M. Fossett, CFE (Certified Fraud Examiner), is the corporate director of loss prevention for Pic 'N Pay Stores, Inc., in Charlotte, North Carolina. He is a member of ASIS Standing Committee on Retail Security and serves on the board of directors of-stores Mutual Association, Inc., of Laurel, Maryland.
COPYRIGHT 1993 American Society for Industrial Security
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Preemployment Screening
Author:Fossett, George M.
Publication:Security Management
Article Type:Cover Story
Date:Apr 1, 1993
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