Recent FCRA Court Rulings
Keeping on top of changes to the Fair Credit Reporting Act and understanding court cases that challenge various aspects of the Act can be a complicated undertaking. Due to the complex nature of credit and consumer reports to begin with, United States courts are frequently tasked with ruling on whether companies have violated the terms of the FCRA. Read on for recent examples of legal battles dealing with the Act and how the cases were ruled.
The FCRA, or Fair Credit Reporting Act, is a United States federal law promoting the accuracy, fairness, and privacy of consumer information in credit reporting. In essence, consumers have the right to know what information is in their file, whether information in their report has been used against them, and to dispute anything contained within the report that they know to be false. A reasonable expectation of privacy is also promised to consumers under the FCRA. You can read more about the FCRA’s consumer rights here.
Kidd v. Thompson Reuters
In 2014, Lindsey Kidd applied for a job with the Georgia Department of Public Health. The state used a subscription-based online research platform operated by Thompson Reuters and obtained information indicating that Kidd had been convicted of a crime. That information turned out to be wrong, but it cost Kidd the job.
As it turns out, Thompson Reuters had provided non-FCRA information to the employer, who then failed to follow the FCRA. Ultimate, Thompson won the case, because their customer acknowledged that the purpose of the information had indeed been for non-FCRA purposes.
Ratliff v. A&R Logistics
In late 2014, Jerome Ratliff Jr. submitted an online application for a position as a commercial truck driver with A&R Logistics, who then obtained a background check from HireRight, a consumer reporting agency. Ratliff alleged that A&R decided not to hire him because of something contained within the background check.
The FCRA imposes a notification requirement on an employer who takes an adverse action against an applicant for employment or an employee when the adverse action is based—in whole or in part—on the contents of a consumer report. Most employers are required to provide written notice of any possible adverse action along with a copy of the consumer report and a summary of the individual’s rights under the FCRA prior to taking any adverse action. However, qualifying transportation employers need only provide written notice within three days of the final adverse decision. The parties involved in this case agreed that A&R is a qualifying transportation employer. Despite this, Ratliff alleged that the company failed to provide him notice of the adverse action. The case was ultimately dismissed.
This case illustrates that, even if an employer fails to follow proper adverse action procedure, an applicant may not have a standing to bring an adverse action claim if the background check is accurate. Historically, they could bring a claim regardless of whether the information contained therein is accurate, provided the employer failed to properly file protocol.
In a recent case, consumer reporting agency giant TransUnion wrongly tagged individuals as terrorists or drug traffickers because their names were similar to those maintained on the Treasury Department’s Office of Assets Control (OFAC) list of these high-risk individuals. Under FCRA guidelines, TransUnion should have verified the identity of these individuals, rather than merely going off a near-match. of As a result, TransUnion faced a $60M jury verdict for willfully violating the FCRA.
Alliance Worldwide Investigative Group, Inc. is a full-service investigative firm well-versed in the Fair Credit Reporting Act. We conduct best practice background checks in a variety of industries, regardless of your company’s size or geographic location. Alliance believes in being proactive, not reactive! Contact us with questions about the FCRA or to set up an employment background screening today!