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Consumer Reports for Employment Background Checks – Class-Action Lawsuit Alleges Information Vendor Violated FCRA for Inaccurate Information

September 26, 2022

A newly proposed class-action lawsuit has alleged that a public information provider violated the Fair Credit Reporting Act (FCRA). The case revealed how the provider sent consumer reports for employment purposes without meeting federal legislative requirements for consumer reporting agencies (CRA). Failure to meet these requirements led to inaccurate reporting about the named plaintiff. As a result, the plaintiff lost their employment.

According to the 27-page complaint, the defendant acquired consumer information from various public sources. These sources included online accessible court records and sex offender registries. These were then organized into reports and sold, which the plaintiff alleges qualify as consumer reports under the FCRA.

The complaint states that the company in question denies being a CRA yet markets itself as providing information and services which the FCRA regulates. As a result, the plaintiff contends that it must adhere to the FCRA, including its requirement that CRAs employ reasonable procedures to ensure maximum possible accuracy in reporting.

The plaintiff alleges that her employer, an airport retail operator, hired a third-party background check provider to perform a check on her as part of its hiring process. This reportedly contained inaccurate information, including theft and felony charges that do not belong to the plaintiff. Due to the inaccuracies of this report, the employer fired the plaintiff. This action led to a suit against the employer and vendor who provided the information.

The plaintiff claims she learned the defendant, in this case, provided inaccurate information to the background check provider through this case. She further emphasized how the defendant repackaged the erroneous report and sold it to her former employer. Allegedly, the defendant should have known that the FCRA regulated such information when used for employment purposes.

The case clarified that the company violated the FCRA in the following ways:

  • Failing to provide her full file upon request;
  • Reporting information likely to harm an individual’s employment without first providing sufficient notice;
  • Providing obsolete information; other
  • Failing to employ reasonable procedures to ensure the maximum possible accuracy of reported information.

The case seeks to represent US residents. The case would represent those who requested disclosure of their consumer reports, were the subject of criminal reports used for employment purposes without sufficient notice, or were the subject of reports that contained obsolete adverse information within the prior two years.

Pre-employ offers free resources to help you stay compliant in your hiring practices. Check out our guide on 5 Tips To Avoid FCRA Non-Compliance to keep your company up to date.

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