When Kenneth Schustereit was 18 years old, he tried to swipe a pile of what he thought was scrap metal from a machine shop's parking lot and ended up spending part of his summer vacation in jail for misdemeanor theft.

That was in 1974. Thirty years later, Schustereit is still paying for his crime.

That's because a background check of his criminal record sold to employers by ChoicePoint data brokers erroneously reported that his misdemeanor was a felony. It also stated that he spent seven years in prison when he spent 51 days in county jail.

Schustereit discovered the mistake only after Home Depot turned him down for a job last year and mentioned the report. He thinks the report cost him half a dozen other jobs as well, although he doesn't know for sure, since most employers don't tell job applicants why they've been rejected.

"I have a stellar work record," said Schustereit, who was laid off nine months ago as a quality-assurance inspector at a Texas plant. "But the problem is that I write down a 30-year-old misdemeanor on the application, and when they look it up, it comes up as a felony. It makes me look like a lying convict."

Recent security breaches at ChoicePoint and Seisint have raised awareness about data brokering and the role that these companies play in identity theft.

But the breaches have brought little attention to another problem with data brokering that can cause just as much harm as identity theft – inaccurate data.

In addition to selling personal information about millions of people to marketers and government agencies, data brokers collect information from public records and sell it to employers conducting background checks on prospective workers.

Employers facing problems with violent workers, falsified credentials and workplace theft have legitimate reasons for seeking background checks. And obtaining such reports has become increasingly easy and cheap when masses of information can be collected electronically and sold online.

But there are no standards for assuring the accuracy of data. And incorrect or misleading information can lead to lost jobs and public embarrassment.

Legislation is currently going through Congress that would establish oversight of data brokers to help prevent identity theft, but it doesn't address problems with data accuracy. The onus for finding errors and correcting them will still be on members of the public.

A 2004 report by the National Association of State Public Interest Research Groups found that 79 percent of credit reports may contain some type of error. There's no reason to believe that criminal records are any more accurate.

The Fair Credit Reporting Act, which covers background checks for issues related to employment, requires that employers get written permission from subjects to perform a check on them. But workers seldom have a choice in the matter if they want a job. If applicants or employees lose a job or promotion because of information in a background check, workers are entitled to receive a copy of the report from the data broker that provided it.

"But what's to prevent a company from doing a check and saying they're not going to hire you for another reason?" said Ronald Peterson, who believes he lost jobs because of his reports. "You and I don't have a right to look at who has asked for our records."

Getting misinformation in a file corrected or removed is another battle.

Misinformation can occur for a number of reasons – clerks mis-key information, criminal charges get dropped but not updated in files, or arrested suspects provide authorities with the name and Social Security number of someone else. If data does get corrected in one database, there is no way to ensure that it's corrected in other databases.

Easy access to masses of digital data that never goes away also means that people are less able to make a clean start in life even after they've served their time or been cleared of charges.

After the terror attacks of Sept. 11, 2001, pharmaceutical company Eli Lilly ran criminal background checks on more than 7,000 employees working for its outside vendors and barred hundreds of workers from the company, including a man who lost his position because of a 6-1/2-year-old dismissed misdemeanor battery charge that should have been expunged from his record.

"We're becoming a nation where there is no social forgiveness," said Beth Givens, founder and director of the Privacy Rights Clearinghouse. "We've got to have wiggle room in our society to accept mistakes we've made in the past. But you can't do that anymore because of records being permanently in these databases."

Schustereit is a case in point.

After being laid off from his job, he applied for work in Home Depot's electrical department. He'd passed a drug test and psychological review and had even discussed salary and working hours with the company. But then Home Depot told him his background didn't check out.

It took several calls to ChoicePoint and Home Depot's headquarters before Schustereit discovered that ChoicePoint had listed him as a felon. The company's report also listed his middle name as Dale instead of Don, which suggested that the company might have confused him with someone else.

Ron Peterson's problem was even more pronounced than Schustereit's. A report from backgroundchecks.com attributed him with an array of serious criminal offenses he never committed.

"In Florida I'm a female prostitute (named Ronnie); in Texas I'm currently incarcerated for manslaughter," Peterson, a California resident, said. "In New Mexico I'm a dealer of stolen goods. Oregon has me as a witness tamperer. And in Nevada – this is my favorite – I'm a registered sex offender."

Back in 1974, Schustereit was originally charged with third-degree felony theft. But in a deal with authorities, he pleaded guilty to a misdemeanor instead and was sentenced to 60 days in jail. He was released early for good behavior. But the ChoicePoint report failed to note either of these significant details.

ChoicePoint blamed the Texas Department of Public Safety, where it said the incorrect felony information originated. The Texas DPS did admit to misidentifying Schustereit's offense, but not for turning his 60-day sentence into seven years. The department said ChoicePoint was responsible for that error.

Schustereit thinks the mistake is indicative of the sloppy work that data brokers do.

"It was incumbent on both the Texas DPS and ChoicePoint to find out if Kenneth Dale was different from Kenneth Don before ruining someone's life," he said.

Texas DPS spokeswoman Tena Mange said her department has quality-control procedures for information that it creates but has little control over the accuracy of electronic data that comes from courts and arresting authorities. And after information leaves the DPS office, the department has no control over how data brokers manipulate it.

Mange said her department always recommends that people counting on criminal background checks for hiring decisions conduct fingerprint matches instead of name matches, even though they're more expensive and take more time.

ChoicePoint declined to comment for this story and Home Depot did not return calls for comment.

After numerous phone calls and e-mails, ChoicePoint and the Texas DPS did fix Schustereit's record, although the damage was already done. And Schustereit has no idea how many other data brokers still list him as a felon.

Peterson had to work hard to get his record cleaned up. He bought reports from ChoicePoint and backgroundchecks.com after State Farm denied him insurance last year. ChoicePoint got his middle name wrong and reported that there was a bench warrant for his arrest in Arizona.

Backgroundchecks.com – which claims to have 4,000 customers worldwide, including Fortune 500 companies – included information about all Ronald or Ronnie Petersons in its database, apparently making no attempt to distinguish relevant records from irrelevant ones, even when Peterson inserted different birth dates to see if the information would change. It didn't.

Backgroundchecks.com President Craig Kessler said there was little data brokers could do to distinguish the records of individuals sharing the same name.

"We're not in the business of authenticating the identity of individuals. All we do is report the data that's supplied to us from the courts," said Kessler. He said the problem stems from the fact that courts are doing away with using Social Security numbers that could help distinguish people with similar names.

"Sex-offender registries do not have anything other than a name in many cases," Kessler said. "We encourage companies to ask additional questions to help them confirm that this is the same person."

But Peterson, who believes that background reports contributed to his inability to get a good job offer for the last two years, said it's easier for employers to pass on candidates who have bad information associated with their name than to do the work to determine if the information is correct.

It took Peterson 40 hours and numerous phone calls to clear his identity in Arizona – the bench warrant was for a different Ron Peterson – and he was able to do so only after submitting his fingerprints.

"The victim is victimized by the system," Peterson said.

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