Bruce’s PBSA Mid-Year 2024 Conference Report
PBSA 2024 Mid-Year Conference
Arlington, VA, March 24-26, 2024
While we still had a good experience at this year’s conference, it was surely not as busy for the exhibitors as we would have liked. The attendance was down at 354 from 418 in 2023. 125 were sponsor attendees with 40 exhibitors (up) and 229 were regular attendees (down a tick).
Many critical, timely and informative sessions were covered over the two days of the conference. This huge investment in time and information is provided to you as a member/attendee. An invaluable return on your small investment in supporting your Association. I won’t list all the sessions here but if you want to know more specifics, see the PBSA website.
While the Mid-Year conference is historically geared to Compliance and Legal issues and this year was no exception, there were plenty of other topics including cyber-attacks, litigation statistics and defense strategies, finding and training background screening employee and others. A big topic was what the CFPB is indicating they want to do about privacy and how PBSA is trying to avoid them making rules that might be appropriate to other industries but not to the screening industry. A lot of time, effort and expense is going on here.
People are still being impacted by the M&A in our industry and all the talk was especially about the most recent big news about First Advantage acquiring Sterling. As Berg Consulting Group is the leading intermediary in doing M&A deals in the screening industry, it was nice to see this high level of interest. Anytime there is consolidation (the integration of Sterling into FA is a huge task), there always seems to be opportunity for other CRAs to pick up clients from the fallout from such. This is true when CRAs and/or providers get merged or acquired.
Industry Trends
Sales Growth. Not every CRA I spoke with is showing growth in sales this year with things beginning to soften for many. Much depends on being in a vertical market that has been soft (tech, on-line sellers, brick-and-mortar retail) or not so soft (healthcare, gig economy).
Hiring good people is still a challenge but a bit less so these days with the capability of hiring experienced workers who can be productive working remotely. Many CRAs have completely abandoned an office environment and gone totally virtual. Lastly, with RIFs reported at Cisive, Sterling, HireRight, DISA, InformData and the coming combination of Sterling into First Advantage, there is a good bit of experienced talent seeking new positions in the industry. Don’t forget to use the industry job board.
Product offerings.
- Employment Verifications. We saw continued discussion about clients giving up on or restricting the use of employment verifications because of the significant fees associated with The Work Number and similar services. While there are other services trying to provide cost-effective employment verification alternatives, this remains an issue with CRAs and end-users. However, the availability of employment and earnings history (W-2s and 1099s) directly from the IRS, which has been around for the past 35 years, now gives instant results and is competitively priced.
- Hound Labs, built to give instant marijuana use results, did not exhibit at this conference and some of their senior people have moved on to other opportunities. It is such a huge challenge to not only create a new product/service but also a challenge to get early adopters but I am sure they will keep trying.
- International scene. Not only has PBSA grown in membership overseas, but we also see more providers offering international background checks and even the mid-sized wholesalers of criminal records getting stronger in this area. For example, international providers are more and more available via 3rd party platforms. Another example is we are getting calls to consult with foreign based companies as they explore entering the US market.
Misc.
A $20.00 bill was found on the floor near our exhibit booth. No one came looking for it, so I was able to make another donation to ANEW Life International founded by Kym Kurey (Vital4). ANEW is doing great things to help survivors of human trafficking and just announced they were gifted a thrift store which will be a big plus toward funding their efforts on a continuing basis. If you want to help, make a donation to http://www.anewinternational.org/
Mergers & Acquisitions. Because this conference draws more people interested in compliance than business, as such, the most frequent discussions were about the FA/Sterling deal. The M&A arena is still very much a sellers’ marketplace for businesses in our industry with many more buyers than sellers. No matter your size there is always someone who would be interested in acquiring your company. Here is a recap of some of the recent deals in our industry since the fall PBSA conference.
- Sterling acquired Vault, an MRO.
- First Advantage acquisition of Infinite ID.
- DISA acquisition of CastleBranch.
- DISA acquisition of Validata, a CRA in the Netherlands.
- HireRight is being taken private by the existing majority stockholders.
- Sterling acquired by First Advantage. When this deal was announced, I sent Bill Greenblatt a note saying my old company finally acquired his old company! 😊
- Rental Services Inc was acquired (a Berg M&A deal)
- RedStar Backgrounds was acquired by another CRA (a Berg M&A deal).
- Drug Free Compliance, Inc. was acquired by another CRA (a Berg M&A deal).
People, Places, Stuff
- Nancy Alt has left Accurate to return to her own consulting firm specializing in compliance.
- Fred Giles is working with PBSA to do audit work for the accreditation program.
- Chris Doyle joined DISA as Sr. Director of Account Management.
- Tim Brothers has left Hound Labs.
- Larry White has left Hound Labs.
- Jon Odle left Universal for Ministry brands.
- Larry Lambeth has retired after selling his company.
- Chad Parodi left ClearStar (CEO) to Paychex.
- Chad Stair was promoted to President of Edge Information.
- Joe Langford (Edge President) has retired.
- Matt Sweeney was promoted to President of Inquiries.
- Kurt Rohifes moved from ClearStar to AssureHire with a title of “making things GO”.
- Bianca Lager (President of Social Intelligence) is consulting after the acquisition by Fama.
- Heidi Pattie is now with InfoCheck Solutions.
- Kim Riff (nee Castellanos) got married.
- Milo Stoparic has left Roundstone.
Issues and education sessions:
CFPB
If you have not heard PBSA is working diligently to communicate with the CFPB and our representatives in congress to attempt to minimize the impact on our background screening industry from the proposed CFPB rules centered around Data Compliance. We could have some severe impact if the rules are not written with our purpose in mind.
The Supreme Court heard oral arguments in October in CFPB v. Community Financial Services Association of America, a case out of the US Court of Appeals for the Fifth Circuit that found the CFPB’s independent funding violates the Constitution’s appropriations clause. The CFPB currently requests money directly from the Federal Reserve, rather than going through the annual congressional appropriations process. SCOTUS ruling expected in June could defund the CFPB and likely lead to the FTC taking back much of what might impact our industry.
Regulatory guidance
There was much compliance discussion around being careful about expunged, legally restricted or sealed cases being reported particularly in jurisdictions which have recently implemented clean-slate laws.
Also be careful to not report duplicative information–as when a conviction is obtained from multiple sources (NatCrim, Statewide crim, courthouse research) and erroneously shown three times on a report even though it is the same case.
Advocacy Day
Of course, the reason to have this conference in DC is so we can go up on the hill to discuss our issues with our representatives. 60 PBSA members participated this year hoping to make an impact by donating their time and knowledge to this process.
Todd Higey did a great educational session on tracking disputes.
- You should be doing this (excel spreadsheet) at your CRA to know why you are getting disputes and where you can strengthen your operations to prevent these. Data would include: What is the source of the claimed dispute? With any particular staff member? A particular data provider? A particular client? A particular process? You cannot manage what you do not measure and this is great data to have should you ever have to defend yourself in court.
- Todd’s study showed 85% of lawsuits against CRAs were bought by 13 law firms with the firm of Consumer Attorneys PLLC representing the most consumers.
Litigation caveats: Another session by Arnall Golden Gregory provided caveats:
- Section 607: Lawsuits center on reporting on the wrong person because of common names, lack of ID, misreporting misdemeanor as a felony, reporting expunged records.
- Section 611: Lawsuits for not re-investigating and for not having appropriated access for a consumer to make a dispute.
- Section 613: Not notifying the applicant of a record found or claims of not having strict procedures regarding accuracy.
- Do a regular review of policies and procedures.
- Stay current with existing law changes.
- Educate all your staff.
- Triple-check all hit reports.
Overall, a great investment of time for everyone to keep abreast of what is happening and what practical suggestions on how to stay in compliance, avoid lawsuits and deal with lawsuits when they inevitably happen.
The PBSA 2024 Annual Conference will be in Boston. (Sept 8-10).
21th Anniversary of PBSA.
Remember, PBSA is the voice of the screening industry.
561-827-2694
Never even consider selling your business without our experienced consultation.
We’ve done over six dozen deals in the screening industry.
