FCRA Class Action Lawsuits Show No Signs of Slowing Down

A new FCRA class action lawsuit is offering more proof that improper background check procedures will land you in court… and could make you pay hefty settlement fees.

This time, a Missouri man is alleging a business he applied to violated the Fair Credit Reporting Act (FCRA) by not hiring him as an assistant manager based on information it received from a Consumer Reporting Agency (CRA). The problem is that the business and the CRA failed to follow proper FCRA law when obtaining the information and how it used it in making its hiring decision.

Court records show that the plaintiff says the business did not provide him with a copy of the report so he could not address any possible inaccuracies in the background check.

If true, that is a direct violation of FCRA law, and as we’ve seen before, does not bode well for the business in court.

Here is a recent sampling of headlines on ActiveCare that all feature FCRA violations:

Tough Time for Amazon – Two Lawsuits Filed for Alleged FCRA Violations

Lawyers Chomp on Chuck E. Cheese’s Class Action FCRA Lawsuit

Car Sharing Services Accused of Violating FCRA

As you can plainly tell, FCRA lawsuits span nearly every industry. Sometimes, it seems as if no one has a handle on how to properly comply with background check law.

An attorney’s perspective

A recent article in Legal News Line reports that David Anthony, an attorney at Troutman Sanders in Richmond, Va., who has extensive experience in this type FCRA litigation, says FCRA cases are filed on a daily basis across the country, and the trend has been increasing steadily.

“Settlements in certain types of FCRA cases have been fairly substantial in the recent years. In addition, the use of background checks during the employment on boarding process is almost a given for most employment opportunities, so the FCRA impacts employers of all shapes and sizes,” Anthony said.

Part of the improbable problem, says Anthony, is that the FCRA is “highly technical,” yet has “deceptively simple requirements.” These requirements trip up even the most well-known and well-respected employers to the tune of millions of dollars in lawsuit payouts.

Don’t be a victim 

More businesses are relying on background checks as a pre-employment hiring tool. That’s certainly a good thing. Some of these same businesses, however, aren’t relying on the advice of a nationally-accredited CRA (like Active Screening) or at least a solid employment law attorney. That’s bad.

Thinking you can navigate FCRA compliance law on your own is like trying to set sail during a Nor’easter. Chances are, you’re going to be up a creek without a paddle.

At Active Screening, we don’t just want our clients to be empowered with the proper working knowledge of FCRA law. We want all businesses that use background checks to know this stuff. It’s good for the businesses, and good for our industry.

Here’s some FCRA compliance basics you need to know:

Written Disclosure and Authorization Required

The FCRA requires any employer intending to run a consumer report to first disclose to applicants or employees that a consumer report may be obtained for employment purposes. This disclosure cannot be included in an employment application or other document that contains any extraneous information. The employer must also obtain an employee’s or applicant’s written consent before running the report.

Check out our list of downloadable disclosure and authorization forms here.

Reporting Requirements

Employers also must comply with specific reporting requirements. Before obtaining a consumer report from a consumer reporting agency, the employer must provide certification to the reporting agency that they are  requesting the report for employment purposes; have provided the required disclosure to the applicant; have obtained the necessary written consent to obtain the report; will provide the applicant with a copy of the report along with notifying them of their rights before taking any adverse action based in whole or in part on the results; and will not use the results from the report in a manner that violates federal or state equal opportunity laws.

Pre-adverse Action and Adverse Action Notices

If the employer plans to take any adverse action based in whole or in part based upon results obtained from a consumer report, the FCRA requires the employer to provide specific notifications to the applicant or employee.

An “adverse action” is either a denial of employment or any other decision that adversely affects any current or prospective employee. The FCRA requires employers to provide a copy of the consumer report results to the applicant or employee and additionally provide them with a copy of their rights under the FCRA (the “Summary of Rights Under the FCRA”) before taking adverse action based upon information contained in the consumer report.

When the employer takes adverse action, they must then provide the applicant or employee with the following information:

  • Name, address, and telephone number of the consumer reporting agency issuing the report
  • Statement that the consumer reporting agency was not the decision maker and can not explain why the adverse decision was made
  • Statement regarding the applicant or employee’s right to obtain a free disclosure of the report from the agency if the applicant or employee requests the report within 60 days of notice of the adverse action
  • Statement regarding the applicant or employee’s right to dispute directly with the consumer reporting agency the accuracy or completeness of any information provided by the agency.

Hopefully, this gives you a solid baseline from which to measure your current FCRA compliance protocols. But as always, if you have questions, please don’t hesitate to contact one of our knowledgeable and friendly team members at 800-319-5580.

This entry was posted in Applicant-Entry Solutions, Background Screening, General, Human Resources, Industry Solutions, News and tagged , , , , , , , , , , , , , , , , , , by Patricia Carlson. Bookmark the permalink.

Patricia Carlson is a content writer who specializes in B2C and B2B inbound marketing. She blogs regularly for clients about the background screening and finance industries, and generates newsletters, white papers and email campaigns for a variety of businesses. Patricia also produces a heavy rotation of editorial material for home design, law enforcement, and family magazines. She’s been writing professionally for more than a dozen years, and for Active Screening for more than two of those. Check out LinkedIn for a roster of Patricia’s clients and links to published works. When she’s not interviewing sources or researching trends, she’s living a fast-paced Florida life questioning the antics of her two young children, partner and mischievous cat. Patricia loves to talk tennis and TV on Twitter – give her a shout @pattycfreelance.

 
        
Active ScreeningBarbara S.
Healthcare Industry

"Here at Holland Hospital, we have been extremely pleased with Active Screening. The report results come back quickly, usually within 24 hours or less.  The staff at Active Screening is easy accessible, knowledgeable and responds to our questions promptly."

Active ScreeningLynn C. Staffing Industry

"Benton Mobley has been and remains my Main point of contact at Active Screening from the beginning; so aside from the comfort of dealing with the same person all these years, there is the most important fact of all;  customer satisfaction. Benton knows the business like the back of his hand; and that is what we need in our fast paced industry of staffing. He is the all-time BEST!  MY employer, Leslie, believes in the notion that great service deserves to be rewarded, so we are here for the duration.We get immediate and personalized attention for any and all concerns we need addressed, and in the staffing industry, this is vital."

Active ScreeningCayce R. Education Industry

"My experience working with Active Screening for our background check process has been very positive.  The reports are almost always completed in a very timely fashion. The information reported appears to be very thorough and accurate.  On the rare occasions that we have questions or problems, the customer service team is always very quick to respond and resolve the issue.  Overall, I am very pleased with the service I receive from Active Screening."

Active ScreeningCraig H. Staffing Industry

"Your customer service is excellent.  The turn around time on background checks is quite fast.  Excellent work.  I haven't had a single problem."

Active ScreeningJackie C. Education Industry

"I wanted to thank you and your staff for being so patient and working so diligently with the Human Resources staff during our recent endeavor to process all of our work study students through background screenings.  We have never had to process so many requests within such a short period of time before, but thanks to you and your staff we made it. Again thank you, we made a good choice in selecting Active Screening."

Active ScreeningLindsey W.  Financial Industry

"I wanted to share my appreciation for your wonderful service...switching background screening companies could have been a stressful task, but your company made the transition seamless. Your website was extremely easy to navigate and the turn around time has been great. I appreciate when information is missing or entered incorrectly during ordering, your company notifies me right away to ensure that my error does not hold the reports results, causing us a delay in hiring an individual...Active Screening has been great to us and I would definitely refer them to others."

Active ScreeningTerry S. Property Management

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Active ScreeningYulesis D.  Staffing Industry

“Interactive Response Technologies (IRT) has more than 2,000 employees at multiple locations across the United States. IRT has been using Active Screening to conduct criminal background checks since 2006. During this time, Active Screening has consistently returned accurate reports, usually with less than 48 hours turnaround. If there are any problems or inconsistencies with the reports, their staff has called to notify us so that we can attempt to rectify the situation. The staff at Active Screening is always courteous and congenial over the phone. In our opinion, Active Screening is outstanding.”

Active ScreeningAndy N. Software Provider

 "Active Screening has helped us screen our applicants in record time for more than two years.... we are very impressed with the professionalism and speed with which their service team responds to our questions. They understand our needs and are a pleasure to work with. I highly recommend them."

Active ScreeningCassie J. Staffing Industry

"The Active Screening team is very informative; they provided a complete consultation on all the services, so I understood what I needed, and saved me hours and hours of my time learning the various services. Their reputation, as being on the cutting edge of employment screening best practices, certainly held true in this instance. The expertise they brought to the table was invaluable to our understanding of our applicants backgrounds. I highly recommend Active Screening to anyone with the task of screening large numbers of applicants and needing reliable customer support."

Active Screening

With over 20 years of law enforcement experience I can attest to the fact that the strongest predictor of future criminal behavior is a person’s criminal history. As the manager of campus safety at my church, I depend on Active Screening to provide a thorough assessment of every criminal history background check we request. For more than 3 years, Active Screening has been faithful to this task with timely, accurate and reliable service.

Active Screening

We have benefited from knowing that we are not exposing the communities we work with or ourselves to unnecessary risk. We continue to have a perfect record in that we have never had a serious incident with a trip participant causing harm or acting inappropriately with any community member or fellow team member- thank goodness!

Active Screening

I would highly recommend any association or organization who conducts background checks to use Active Screening. In addition to my involvement with WAHA, I am an officer in a corporation with over 500 employees who provide treatment, mental health, and correctional services for children and adolescents. Our company is mandated by law to do comprehensive background searches and I can say with the utmost sincerity that Active Screening product rivals that of any government or other private sector process.

Active Screening

We have used Active Screening and their solution VERITY to screen all our coaches and volunteers working with youth. The online system gives us an easy and cost-effective solution to collecting forms and payments from our applicants...and we simply login to view the results of who passed or failed. It's so easy....thank you Active Screening.