CRA to Pay $3.6 Million to Settle FCRA Lawsuit

December 3, 2019 Off By administrator
Scales and gavel.

Written By ESR News Blog Editor Thomas Ahearn

On November 12, 2019, a Florida federal judge granted final approval for a $3.6 million settlement in a class action lawsuit filed against a Consumer Reporting Agency (CRA) to resolve allegations that the CRA violated the federal Fair Credit Reporting Act (FCRA) by providing employers with background checks conducted on job applicants without proper authorization as required under the FCRA.

Plaintiffs Shawana Sanders and Kenyatta Williams – on behalf of themselves and similarly situated individuals – claimed the Defendant CRA violated the FCRA by providing certain reports without first obtaining certification from employers using the reports that they would comply with the FCRA in using the reports. The CRA vigorously denied liability and wrongdoing, but indicated the lawsuit was being settled to avoid litigation and court costs.

The Notice of Class Action Settlement stated: The Defendant has denied all claims in the Lawsuit and contends that it acted lawfully and in compliance with the FCRA at all times. The Defendant has multiple defenses to the claims in the Lawsuit. Despite denying liability and wrongdoing, the Defendant has decided it is in its best interest to settle the Lawsuit to avoid the burden, expense, risk, and uncertainty of continuing the litigation.

Senior U.S. District Judge John E. Steel approved a settlement where the CRA agreed “to establish a gross settlement fund in the amount of $3,653,650” for a Settlement Class of approximately 18,931 consumers who were the subject of consumer reports furnished by the CRA for employment purposes between July 11, 2013, and January 11, 2019, according to the settlement filed in the U.S. District Court Middle District of Florida.

Enacted in 1970, the FCRA promotes the accuracy, fairness, and privacy of consumer information contained in the files of “CRAs” – the official term for background check providers – and also protects consumers from the willful and/or negligent inclusion of inaccurate information in their “consumer reports,” the official term for background check reports used for employment purposes.

Under Section 1681b(b)(1) of the FCRA, a CRA may furnish a
consumer report for employment purposes only if the person obtaining the report
certifies to the CRA compliance with requirements that “a clear and conspicuous
disclosure has been made in writing” to a consumer that a report for employment
purposes may be obtained and that the consumer authorized in writing the
procurement of the report.

Section 1681b(b)(1) of the FCRA also requires that a person intending to take “adverse action” such as termination against a consumer based in whole or in part on a consumer report for employment purposes shall provide to the consumer a copy of the report and a copy of “A Summary of Your Rights Under the Fair Credit Reporting Act” prescribed by the Consumer Financial Protection Bureau…

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