On April 9, 2024, a California Superior Court granted final approval of a $5.695 million settlement in a class action lawsuit for alleged violations of the federal Fair Credit Reporting Act (FCRA) where the “Plaintiff alleges that Defendant negligently and willfully violated the FCRA by failing to maintain reasonable procedures to assure the maximum possible accuracy in the preparation of the credit reports it resold regarding the settlement class members,” according to the Settlement Order.
“Plaintiff alleges that Defendant resold inaccurate information from one or more of the nationwide consumer reporting agencies (CRAs) where the consumer report contained a notation that the consumer was deceased and where either one or two of the CRAs also provided information to Defendant that did not include a notation that the consumer was deceased. Plaintiff further alleges that Defendant made no effort to determine whether the consumer was in fact deceased.”
Plaintiff filed a class action complaint in the Superior Court of California, County of San Diego in February 2022 alleging that she had “suffered concrete financial and pecuniary harm arising from monetary losses relating to credit denials, loss of use of funds, loss of credit and loan opportunities, out-of-pocket expenses, and other related costs. Further, Plaintiff alleges that she has suffered concrete harm in the form of financial and dignitary harm arising from the injury to credit rating and reputation.”
The settlement agreement for the approximately 26,833 settlement class members was described as follows in the Settlement Order: “Under the proposed settlement agreement, Defendant will pay the settlement amount of $5,695,000. Defendant will also be required to improve its reporting practices to more clearly state that: (1) the data it is reporting is precisely the data it received from the CRAs; and (2) Defendant cannot evaluate its content.” Defendant denied any wrongdoing despite settling.
Enacted by the United States Congress in 1970, the Fair Credit Reporting Act (15 U.S.C § 1681) protects information collected by consumer reporting agencies such as credit bureaus. The FCRA states the following requirement in a section called “Accuracy of Report”: “Whenever a consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.”
ClearStar is a global Human Resources technology company specializing in background checks, drug testing, and occupational health screening. ClearStar offers employers compliance services that include a full understanding of the FCRA and other laws affecting background screening in the United States and around the globe. ClearStar also provides credit history searches for employers where allowed by applicable laws and regulations. To learn more about ClearStar, please contact us.
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Thomas Ahearn - Digital Content Editor
Thomas Ahearn is a Digital Content Editor at ClearStar, a leading Human Resources (HR) technology company specializing in background checks, drug testing, and occupational health screening. He writes about a variety of topics in the background screening industry including Artificial Intelligence (AI), "Ban the Box," class action lawsuits, credit reports, criminal records, drug testing, Equal Employment Opportunity Commission (EEOC), Fair Credit Reporting Act (FCRA), Form I-9, identity theft, privacy, social media screening, and workplace violence.
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