CRA Faces Proposed Class Action Over Allegedly Inaccurate Reporting

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CRA Faces Proposed Class Action Over Allegedly Inaccurate Reporting
May 25, 2023

A major consumer reporting agency (CRA) now faces a proposed class action lawsuit. According to the suit, the CRA failed to maintain procedures to ensure it provided accurate background checks to employers for making hiring decisions. As a result, inaccurate reports have caused job applicants to lose employment opportunities.

The Fair Credit Reporting Act (FCRA) requires CRAs, such as background check providers, to maintain “reasonable procedures.” These procedures ensure the maximum possible accuracy in reporting. The lawsuit alleged that the defendant violated this requirement. According to the suit, the defendant used a system allowing vendors to enter data to create reports manually.

According to the plaintiff, the defendant does not back up the data with photographs of the records entered for the CRA to review. This failure has allegedly caused the CRA to provide employers with thousands of inaccurate reports for the last two years. As a result, many applicants, such as the plaintiff who filed this suit, have lost job opportunities.

The issue came to light when the named plaintiff applied for a position as a patient coordinator with a dental services provider in Connecticut. The employer issued the plaintiff a conditional offer of employment contingent on the outcome of a background check. According to the suit, the employer then requested a background check from the defendant. 

Though the CRA searched its database and found no criminal records, it also hired a third-party vendor to screen the plaintiff. The third-party vendor searched for criminal records in the Hartford County courthouse and manually entered four criminal convictions bearing the plaintiff’s name. However, the plaintiff complained that these convictions belonged to a different individual with the same name. 

Despite disputing the records’ accuracy and having them removed, the employer rescinded the plaintiff’s job offer. As a result, the plaintiff filed this lawsuit with accusations of the CRA failing to ensure maximum accuracy. In addition, the plaintiff stated that the CRA committed willful and negligent violations of the FCRA. As a result, the plaintiff now seeks statutory damages of $1,000 per class member, punitive damages, and attorney fees and costs.

As this suit revealed, complying with the FCRA is crucial for avoiding unnecessary litigation and costs. The best way to ensure accurate and compliant screening is to partner with a trusted and experienced screening provider familiar with the requirements of local, state, and federal laws regulating consumer reporting.

Pre-employ offers free resources to help you stay compliant in your hiring practices. Check out our guide on 5 Tips To Avoid FCRA Non-Compliance to keep your company up-to-date.