Class Action Lawsuit Against Employment Background Screening Firm Highlights Compliance Concerns for Consumer Reporting Agencies

A recent class action Fair Credit Reporting Act lawsuit filed against the employment screening service firm InfoMart Inc. highlights important compliance concerns for Consumer Reporting Agencies.  The lawsuit is Robert Mills II v. Infomart Inc., filed in the U.S. District Court for the Northern District of West Virginia as case number 3:17-cv-00048.

Defendant Robert Mills claims he was denied a job because of false information provided by pre-employment screening service InfoMart Inc.  Mills says that when he applied for a job in 2015, InfoMart reported a civil judgment that had been entered against him in 2010 when he was on active military duty, but failed to mention in the report that it had been vacated. He further claims InfoMart Inc. also reported a criminal record belonging to a different Robert Mills. 

The FCRA requires consumer reporting agencies to (a) notify job applicants if they report adverse public records to an employer to give the applicant time to correct false information, or (b) maintain strict procedures designed to ensure that the information is always complete and up-to-date.  Mills claims InfoMart did neither of these things.

“Defendant failed to comply with the contemporaneous notice requirement ... because it sent plaintiff no notice when it reported this information,” Mills wrote. “And defendant entirely failed to report the complete up-to-date criminal and civil-judgment records — it did not and systemically does not obtain full personal identifiers with its criminal records and does not obtain up-to-date dispositions for its civil record.”

Mills applied for the job in early 2015, and says he was denied the job soon after InfoMart completed the background check in late April of that year. Mills claims he then wrote to InfoMart in December and asked for his file which is when he found out about the allegedly erroneous information.

Under the FCRA consumer reporting agencies are required to disclose the sources of the information they report.  Mills claims InfoMart failed to comply, acting as if they had gathered the information themselves when in fact it actually was acquired from TransUnion.

Mills alleged “Defendant is aware of its obligations under the FCRA, but chooses not to comply because the costs of compliance would harm its bottom line and impair its business model”. “Discovery will show that defendant routinely fails to reveal its true sources of public-record information, like TransUnion, in its FCRA file disclosures. It makes this choice despite the clearly worded requirement in the FCRA that [consumer reporting agencies] reveal the sources of the information they report.”

This lawsuit points out two compliance issues for consumer reporting agencies:

1.  CRAs who issue reports for employment purposes need to have systems in place to (a) notify job applicants if they report adverse public records to an employer to give the applicant time to correct false information, or (b) maintain strict procedures designed to ensure that the information is always complete and up-to-date.  In our experience the second alternative is problematic since it is can be difficult to establish and prove.

2.  All CRAs need to disclose the sources of the information they report when making file disclosures to consumers. 

For more information or to discuss FCRA compliance issues contact Joe Messer at (312) 334-3440 or jmesser@messerstrickler.com