Consumer Financial Services Law Monitor

Consumer Financial Services Law Monitor

monitoring the financial services industry to help companies navigate through regulatory compliance, enforcement, and litigation issues

Tim J. St. George

Tim J. St. George

Blog Role:
Contributor – Credit Reporting & Data Brokers

CFS Value:
Tim specializes in the areas of business disputes and complex litigation in the financial services industry.

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Ban the Box Bill Passes Virginia State Senate, Awaits Review by House

Posted in ALL CFS Blog Entries, Background Screening
On January 27, Sen. Rosalyn Dance’s “ban the box” bill, SB 1171, passed the Virginia Senate by a 22-17 vote.  The bill proposes to “ban the box” by preventing prospective employers from asking about a job applicant’s criminal history at the initial employment application stage.  The bill was introduced as follows:  “Public employment; inquiries by… Continue Reading

Third Circuit Finds Consumer Standing in FCRA Data Breach Litigation

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers
On January 20, the Third Circuit in In re Horizon Healthcare Services Data Breach Litigation reversed a district court’s dismissal of a lawsuit under the Fair Credit Reporting Act involving a data breach at Horizon Healthcare.  The Third Circuit held that the plaintiffs had standing to pursue their claims under the FCRA without any accompanying… Continue Reading

District Court Finds That “Complete and Up to Date” Requirement of FCRA § 1681K Does Not Include an Accuracy Component

Posted in ALL CFS Blog Entries, Background Screening, Credit Reporting & Data Brokers, Featured Posts
A consumer reporting agency complies with § 1681k(a)(2) of the Fair Credit Reporting Act (“FCRA”) if it “maintain[s] strict procedures designed to insure that whenever public record information which is likely to have an adverse effect on a consumer’s ability to obtain employment is reported it is complete and up to date.” In Kelly v.… Continue Reading

L.A. Becomes Latest Jurisdiction to “Ban the Box” for Private Employers

Posted in ALL CFS Blog Entries, Background Screening
Los Angeles recently became the latest major city to pass a city ordinance that “bans the box” regarding inquiries into job applicants’ criminal histories from initial employment applications.  The ordinance is significant in that it specifically regulates private sector employers with 10 or more employees.  Under the ordinance, private employers will be prohibited from asking… Continue Reading

Court Finds That Spokeo Does Not Bar Enforcement of Background Check Class Action Settlement

Posted in ALL CFS Blog Entries, Background Screening
In Schumacher v. SC Data Center, the plaintiff brought three class action claims against SC Data Center, Inc. under the Fair Credit Reporting Act related to its pre-employment background check process.  Specifically, the plaintiff alleged that SC Data Center’s background check process violated the disclosure and adverse action provisions of the FCRA.  The substance of… Continue Reading

CFPB Signals Intent to Move Forward With System Allowing Consumers to Rate Companies’ Responses to Complaints

Posted in Background Screening, Credit Reporting & Data Brokers, Debt Buyers & Collectors
According to a Federal Register notice published on November 29, the Consumer Financial Protection Bureau is soliciting further comments on its proposal to provide consumers with the option to fill out a short survey on their satisfaction with companies’ resolution of consumer complaints.  In the notice, the CFPB described the proposal: The purpose of this… Continue Reading

District Court Wrestles with Interpretation of Webpage in Background Check Disclosure Lawsuit

Posted in ALL CFS Blog Entries, Background Screening
The Fair Credit Reporting Act requires that employers provide prospective applicants with a disclosure before obtaining a pre-employment background check from a consumer reporting agency.  This disclosure must be in a single document that consists “solely of the disclosure” that a consumer report may be obtained for employment purposes.  In Burnthorne-Martinez v. Sephora USA, Inc.,… Continue Reading

FTC Issues Bulletin for Consumers Applying for Apartments and for Handling Background Check Process

Posted in ALL CFS Blog Entries, Background Screening
On November 28, the Federal Trade Commission issued a bulletin for consumers relating to the process for applying for an apartment and the related background check process that can be undertaken by the potential landlord. The FTC stated: “Landlords can check your credit, criminal history, and even your rental history.  They may ask your permission… Continue Reading

FCRA Lawsuits Increase in 2016

Posted in ALL CFS Blog Entries, Background Screening, Credit Reporting & Data Brokers, Debt Buyers & Collectors
While the number of lawsuits filed under the Telephone Consumer Protection Act and the Fair Debt Collection Practices Act remained relatively steady or fell, claims under the Fair Credit Reporting Act rose sharply between October 2015 and October 2016.  The total number of FCRA lawsuits increased from 283 to 355 – a 25.4 percent increase. … Continue Reading

District Court Finds Receipt of Allegedly Improper Background Check Disclosure is Sufficient to Confer Standing Under Spokeo

Posted in ALL CFS Blog Entries, Background Screening
In the wake of the Supreme Court’s decision in Spokeo, Inc. v. Robins, courts and litigants alike have been trying to determine the contours of constitutional standing when it comes to procedural violations of consumer protection statutes.  This past week, the District Court for the Central District of California weighed in, finding in favor of… Continue Reading

Court Certified FCRA Class Over Spokeo Objections

Posted in ALL CFS Blog Entries, Background Screening, Featured Posts
A federal judge in the Northern District of California certified a class of job applicants in a lawsuit claiming a background check firm violated the federal Fair Credit Reporting Act.  The Court certified the class over the arguments of the defendant that the members of the putative class lacked Article III standing under the standard… Continue Reading

State Legislatures Begin to Consider Bans on Asking About Applicants’ Prior Salary History

Posted in ALL CFS Blog Entries, Background Screening
Bills have recently been introduced in a number of states that would prohibit prospective employers from inquiring about an applicant’s salary history.  These bills are aimed at preventing wage discrimination among workers that perform similar or identical job functions.    These bills follow on the heels of approved legislation in Massachusetts.  Massachusetts Senate Bill 2119, which… Continue Reading

Federal Court Dismisses Putative FCRA Class Action for Lack of Standing and Plausible Willful Violation

Posted in ALL CFS Blog Entries, Background Screening, Credit Reporting & Data Brokers, Debt Buyers & Collectors
On August 19, the United States District Court for the District of Nevada dismissed a putative Fair Credit Reporting Act class action against two taxi companies that had allegedly violated the Fair and Accurate Credit Transactions Act by including the first digit and last four digits of consumers’ credit card numbers on fare receipts.  The… Continue Reading

Court Dismisses TCPA Claim Because Text Messaging App Does Not “Make” Calls

Posted in ALL CFS Blog Entries, Cyber Security, Information Governance & Privacy
In Cour v. Life360, Inc., the United States District Court for the Northern District of California granted a defendant’s motion to dismiss a claim under the  Telephone Consumer Protection Act, finding that the defendant’s system for sending text messages did not constitute “making” a call under the statute.  In reaching its decision, the Court advanced… Continue Reading

CFPB Files Amicus Brief Before Ninth Circuit in Spokeo

Posted in ALL CFS Blog Entries, Background Screening, Credit Reporting & Data Brokers, Debt Buyers & Collectors
On May 16, the Supreme Court in Spokeo, Inc. v. Robins found that the Ninth Circuit had not adequately addressed whether the named plaintiff had sufficiently alleged a “concrete” injury in connection with his putative FCRA class action against Spokeo, Inc.  In Spokeo, the plaintiff (Robins) sued the “people search engine” for alleged violations of the… Continue Reading

Sirius XM Settles TCPA Class Action for $35 Million

Posted in ALL CFS Blog Entries, Auto Finance, Debt Buyers & Collectors, Mortgage Lenders & Servicers
In one of the largest settlements in history under the Telephone Consumer Protection Act (“TCPA”), Sirius XM Radio Inc. agreed to pay $35 million to resolve putative class actions filed throughout the country alleging that it had used an automatic telephone dialing system to engage in telemarketing to trial users of its satellite radio service… Continue Reading

City of Brotherly Love has Little Love for Employment Credit Checks

Posted in ALL CFS Blog Entries, Background Screening
Earlier this month, the Mayor of Philadelphia signed legislation regulating the use of credit checks in employment decisions.  By enacting this legislation, Philadelphia joins a growing cast of cities and states throughout the country prohibiting employment credit checks in certain instances.  When coupled with recent federal Equal Employment Opportunity Commission enforcement actions against employers based… Continue Reading

New Putative Class Action Challenges FCRA Disclosure Form

Posted in ALL CFS Blog Entries, Background Screening
A new putative class action against Petco Animal Supplies Inc. was filed in the U.S. District Court for the Southern District of California.  The complaint challenges Petco’s form of disclosure for employment background checks.  “By embedding its purported disclosure in an employment application and including extraneous information within and around the disclosure, defendant disregarded well-established… Continue Reading

Connecticut Becomes Latest State to “Ban the Box”

Posted in ALL CFS Blog Entries, Background Screening
On June 1, Connecticut Governor Dan Mallory signed the Fair Chance Employment Act (CT HB 5237) into law.  The statute, like other “ban the box” laws nationwide, prohibits covered employers from asking about an applicant’s criminal history on an initial employment application.  Under the Act, “employers” are broadly defined to mean “any person engaged in… Continue Reading

Court Finds Plaintiff’s Background Check Disclosure Claim Against Target Misses the Bullseye

Posted in ALL CFS Blog Entries, Background Screening
In Just v. Target Corporation, the plaintiff alleged that Target willfully violated the Fair Credit Reporting Act by providing him with a background check disclosure form that did not consist “solely of the disclosure” that a background check would be obtained.  In a victory for employers, the court dismissed the plaintiff’s allegations at the pleadings… Continue Reading

U.S. Supreme Court Remands Spokeo in Ruling that Mere Technical, Statutory Violation Is Insufficient to Confer Article III Standing

Posted in ALL CFS Blog Entries, Background Screening, Credit Reporting & Data Brokers, Debt Buyers & Collectors, Featured Posts
On May 16, 2016, the Supreme Court of the United States issued its much-anticipated decision in Spokeo, Inc. v. Robins. Spokeo considered whether Congress may confer Article III standing by authorizing a private right of action based on the violation of a federal statute alone, despite a plaintiff having suffered no “real world” harm. The… Continue Reading

Supreme Court Deems Statistical Evidence Admissible in Class Action

Posted in ALL CFS Blog Entries, Background Screening, Credit Reporting & Data Brokers, Debt Buyers & Collectors
In March, the Supreme Court, in a 6-2 decision, held in Tyson Foods, Inc. v. Bouaphekeo that the district court did not err in certifying and maintaining a class of employees who alleged violations of the Fair Labor Standards Act, notwithstanding the employees’ reliance on “representative evidence” to determine the number of additional hours that… Continue Reading

Maryland Legislature Passes Bill Preventing Revival or Extension of Statute of Limitations for Debt Collection Based on Consumer Complaint

Posted in ALL CFS Blog Entries, Debt Buyers & Collectors, Featured Posts
In April, the Maryland General Assembly approved legislation on consumer debt collection that addresses how statutes of limitation may be calculated against consumers. Senate Bill 771, which addresses certain “debt buyers” and “debt collectors,” provides that “certain actions may not revive or extend a certain statute of limitations prohibiting a debt buyer or a certain… Continue Reading

District Court Denies Motion for Class Certification Under FCRA

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers
In Jones v. Sterling Infosystems, 1:14cv3076 (S.D.N.Y. 2016), the district court recently denied class certification against a background screening company that was alleged to have violated 15 U.S.C. § 1681k(a) by not sending out the notice envisioned under § 1681k(a)(1) at the time that criminal record information was transmitted to employers.  The court denied class… Continue Reading