Background Check Provider Agrees to $4 Million Settlement To Resolve Claims of Inaccurate Criminal Record Information

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Background Check Provider Agrees to $4 Million Settlement To Resolve Claims of Inaccurate Criminal Record Information
November 22, 2022

A provider of criminal background checks has reached a settlement. This settlement resolves claims that the provider included inaccurate criminal record information in provided background checks. The settlement is for $4 million and will benefit two consumer classes.

The class action lawsuit centers upon allegations that the defendant violated the federal Fair Credit Reporting Act (FCRA) Section 1681(e)(b). Allegedly, the defendant included false criminal record information in the background checks it provided. 

The lawsuit claims that the company violated the FCRA by falsely classifying certain criminal convictions as violent offenses or felonies in its reports. These incorrect classifications violated the FCRA’s requirement that consumer reporting agencies “follow reasonable procedures to ensure the maximum possible accuracy of the information concerning the individual about whom the report relates.”

The plaintiff filed this case after an online rental provider banned him from making reservations. According to the claim, the provider based this decision on criminal background check results. The plaintiff’s report stated that the plaintiff had a felony conviction categorized as a violent offense.

However, the lawsuit claimed that Minnesota law did not categorize his conviction as a violent offense. Furthermore, the courts changed his conviction into a misdemeanor because he completed his probation terms without a prison sentence.

Both parties have agreed to the settlement and expect final approval on November 15th, 2022. The settlement classes include a deemed misdemeanor class and a Nationwide Inaccurate Offense Characterization Class. 

Consumers with convictions reported as felonies instead of misdemeanors between October 12th, 2018, and July 13th, 2021, make up the Deemed Misdemeanor Class. 

Consumers with offenses characterized as violent despite the crime’s description proving otherwise make up the Nationwide Inaccurate Offense Characterization Class. More specifically, the consumers in this class include those affected between October 12th, 2018, and September 29th, 2021. Both classes will receive a share of the $4 million settlement, and approximately 39,000 consumers expect to receive a payment.

As this settlement shows, it is crucial for employers, landlords, and other users of background checks to ensure that the reports they use are accurate and compliant with the FCRA’s requirements. This assurance prevents cases like this, which can lead to significant liability. The best way to do this is to work with a trusted and quality background check provider who is abreast of the developing regulations concerning the FCRA and other applicable laws.

Pre-employ makes background checks easy and reliable. Speak with a sales representative today.

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