Consumer Reports for Employment Background Check – Class Action Alleging Information Provider Violated the FCRA for Inaccurate Information

September 26, 2022

A recently proposed class action lawsuit alleged that a public information provider violated the Fair Credit Reporting Act (FCRA). The case revealed how the provider submitted consumer reports for employment purposes without meeting federal legislative requirements for consumer reporting agencies (BOW). Failure to comply with these requirements has led to inaccurate reporting of the named applicant. As a result, the plaintiff lost his job.

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

The complaint says the company in question denies being a CRA but holds itself out as providing FCRA-regulated information and services. Accordingly, Plaintiff contends that it must adhere to the FCRA, including its requirement that credit rating agencies employ reasonable procedures to ensure the greatest possible accuracy in reporting.

The plaintiff alleges that her employer, an airport retail operator, hired a third-party background check provider to perform a background check on her as part of its hiring process. This report allegedly contains inaccurate information, including accusations of theft and felony that do not belong to the complainant. Because of the inaccuracies in this report, the employer terminated the plaintiff. This action led to a lawsuit against the employer and vendor who provided the information.

The plaintiff claims to have learned that the defendant in this case provided inaccurate information to the background check provider in connection with this case. She further pointed out how the defendant repackaged the erroneous report and sold it to his former employer. Apparently, the defendant should have known that the FCRA regulated this information when used for employment purposes.

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

  • Not providing his complete file on request;
  • Reporting information that could harm someone’s job without sufficient notice;
  • Provide outdated information; and
  • Failing to use reasonable procedures to ensure the maximum possible accuracy of reported information.

The case seeks to represent US residents. The case would represent those who sought disclosure of their consumer reports, were the subject of criminal reports used for employment purposes without adequate notice, or were the subject of reports containing outdated adverse information within two previous years.

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