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

Background Screening

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Courts Approve $950,000 FCRA Class Action Settlement Against McDonald’s

Posted in ALL CFS Blog Entries, Background Screening
On March 15, the United States District Court for the Central District of California granted final approval of a Fair Credit Reporting Act class action against fast food restaurant McDonald’s.  The named plaintiff, James Wesley Carter, originally brought the action against McDonald’s in July 2015 alleging that McDonald’s violates the rights of consumers by failing… Continue Reading

Improper Form of Background Check Disclosure Not Sufficient Injury for Standing

Posted in ALL CFS Blog Entries, Background Screening
Ever since the Supreme Court decided Spokeo, Inc. v. Robins last year, courts have been struggling to define the contours of standing in “no injury” class actions.  In Fields v. Beverly Health and Rehabilitation Services, Inc. et al., the District of Minnesota recently granted a motion to dismiss a Fair Credit Reporting Act claim in… Continue Reading

Kansas Federal Court Grants Partial Approval to Background Check Disclosure Class Action Settlement

Posted in ALL CFS Blog Entries, Background Screening, Credit Reporting & Data Brokers
On January 25, the United States District Court for the District of Kansas granted partial preliminary approval to the class settlement in Lengel v. HomeAdvisor, Inc., No. 15-2198-KHV.  The plaintiff, Emerald Lengel, brought a class action lawsuit in January 2015, alleging that HomeAdvisor, her then-potential employer, violated the Fair Credit Reporting Act.  Lengel alleged HomeAdvisor… Continue Reading

Join Us at the NAPBS 2017 Mid-Year Legislative & Regulatory Conference

Posted in ALL CFS Blog Entries, Background Screening, Credit Reporting & Data Brokers
We are pleased to announce that Troutman Sanders partners David Anthony, Cindy Hanson,  Ron Raether, and Ashley Taylor will be featured panelists at the National Association of Professional Background Screeners (“NAPBS”) 2017 Mid-Year Legislative & Regulatory Conference to be held March 20-21 in Arlington, Virginia.  In an interview-style format, David will have a conversation with… Continue Reading

District Court Finds That Sending Copy of Background Check Satisfies FCRA Pre-Adverse Action Obligations

Posted in ALL CFS Blog Entries, Background Screening
Under the Fair Credit Reporting Act, when an employer is considering rejecting an applicant based on a background check (often referred to as a consumer report), it must follow certain “pre-adverse” action procedures.  Specifically, an employer must provide the applicant with a copy of his or her background check and a summary of rights under… Continue Reading

Defendant Requests Rehearing En Banc of Ninth Circuit’s Finding of Willful FCRA Violation

Posted in ALL CFS Blog Entries, Background Screening
As we previously reported, on January 20, the Ninth Circuit Court of Appeals issued a decision of first impression in Syed v. M-I, LLC, a putative class action, when it held that a prospective employer willfully violated the Fair Credit Reporting Act by including a liability waiver in its background check disclosure form.  The Ninth… Continue Reading

Court Denies Background Screener’s Spokeo Motion Related to Address History Reporting

Posted in ALL CFS Blog Entries, Background Screening
On February 13, a judge in the United States District Court for the Southern District of New York denied a background screening company’s motion to dismiss a putative Fair Credit Reporting Act class action on the basis of the Supreme Court’s holding in Spokeo v. Robins, 136 S. Ct. 1540 (2016).  As has been the… Continue Reading

Blue Shield Avoids Potential TCPA Class Action Liability in Prerecorded Phone Call Case

Posted in ALL CFS Blog Entries, Background Screening
A judge in California recently dismissed a putative Telephone Consumer Protection Act class action against Blue Shield of California, an insurance provider.  In Smith v. Blue Shield of California Life & Health Insurance Co. (C.D. Cal.), the judge found that the telephone call at issue was, as a matter of law, not the type of… Continue Reading

Ninth Circuit Reverses Dismissal of Plaintiffs’ FCRA Complaint against Fannie Mae

Posted in ALL CFS Blog Entries, Background Screening
In an unpublished decision, the Ninth Circuit Court of Appeals ruled that a complaint sufficiently alleged that Federal National Mortgage Association (“Fannie Mae”) may act as a consumer reporting agency (“CRA”) under the Fair Credit Reporting Act, which could potentially subject Fannie Mae to the accuracy requirements imposed by section 1681e(b) of the FCRA. In… Continue Reading

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

New Jersey District Court Grants Michaels Stores’ Spokeo Motion on Consolidated FCRA Action

Posted in ALL CFS Blog Entries, Background Screening
Last week, a district court in New Jersey dismissed a consolidated action against Michaels Stores, Inc., finding that the plaintiffs lacked Article III standing to bring their FCRA claims. In the consolidated action, plaintiffs Christina Graham, Gary Anderson, Michele Castro, Janice Bercut, and Michelle Bercut applied for and were hired by Michaels.  Despite obtaining employment,… Continue Reading

Employers Beware: Ninth Circuit Finds Inclusion of Liability Waiver in FCRA Background Check Disclosure Form is a Willful Violation

Posted in ALL CFS Blog Entries, Background Screening
On January 20, 2017, the Ninth Circuit Court of Appeals issued a decision of first impression in Syed v. M-I, LLC, a putative class action, when it held that a prospective employer willfully violated the Fair Credit Reporting Act (FCRA) by including a liability waiver in its FCRA background check disclosure form. Any employer who… Continue Reading

Plaintiff Has Standing in FCRA Class Action Suit, Says Pennsylvania Magistrate Judge

Posted in ALL CFS Blog Entries, Background Screening, Credit Reporting & Data Brokers
On January 18, a United States magistrate judge for the Middle District of Pennsylvania opined that a plaintiff has standing under Spokeo to pursue his Fair Credit Reporting Act class action complaint in federal court.   In Miller v. Trans Union LLC, plaintiff Ronald J. Miller alleges that Trans Union violated section 1681g(a) of the FCRA… Continue Reading

Lands’ End Faces TCPA Class Action from Alleged Junk Faxes

Posted in ALL CFS Blog Entries, Background Screening
Lands’ End, a Wisconsin-based clothing retailer, was named as a defendant in a putative class action filed January 4 under the Telephone Consumer Protection Act in federal court in Connecticut.  The TCPA includes, as a result of the Junk Fax Protection Act of 2005, prohibitions on sending unsolicited fax advertisements without a required opt-out notice… 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
GavelA 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

Ninth Circuit Hears Oral Argument in Spokeo Following Remand From Supreme Court

Posted in ALL CFS Blog Entries, Background Screening
On December 13, the Ninth Circuit Court of Appeals heard arguments in the long‑simmering Robins v. Spokeo Inc. putative class action, following reversal of the appellate court’s previous opinion by the Supreme Court.  Robins alleges that Spokeo violated the Fair Credit Reporting Act by maintaining various inaccurate data points about the plaintiff in an online… 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

California Federal Court Remands Background Check Class Action on Basis of Article III Standing

Posted in ALL CFS Blog Entries, Background Screening
On December 2, the court in Lee v. Hertz Corp., No. 15-cv-04562-BLF (N.D. Cal.) granted a motion to dismiss a putative Fair Credit Reporting Act class action against Hertz.  The court’s order, which was based on a finding that the named plaintiffs—Peter Lee and Latonya Campbell—lacked Article III standing, remanded the case to San Francisco… Continue Reading

Petco Motion to Dismiss FCRA Background Screening Class Case is Denied

Posted in ALL CFS Blog Entries, Background Screening
Petco’s motion to dismiss a background screening class action alleging violation of the Fair Credit Reporting Act was recently denied by a district court in the Southern District of California.  In the putative class action, the plaintiffs alleged that Petco’s background check disclosure form violated the FCRA because it was not provided in a stand-alone… Continue Reading

OPM Issues Final Rule on Inquiring into Job Applicants’ Criminal History and Credit Information

Posted in ALL CFS Blog Entries, Background Screening, Credit Reporting & Data Brokers
Effective January 3, 2017, the Office of Personnel Management will require that, unless an exception has been granted, federal hiring agencies cannot inquire into an applicant’s criminal history or adverse credit information until after a conditional offer of employment has been made.  This federal initiative is consistent with, and provides a timely reminder of, the… 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