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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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

California Court Grants Final Approval of $1.5 Million TCPA Robocall Settlement

Posted in ALL CFS Blog Entries, Background Screening, Credit Reporting & Data Brokers, Mortgage Lenders & Servicers
On November 7, the United States District Court for the Southern District of California granted final approval of the class settlement in Stemple v. QC Holdings, Inc., No. 3:12-cv-01997 (S.D. Cal.).  The plaintiff in the case alleged that QC Holdings, a check-cashing and short-term loan company, negligently and willfully violated the Telephone Consumer Protection Act… Continue Reading

TransUnion Bid to Decertify FCRA Classes Denied

Posted in ALL CFS Blog Entries, Background Screening
Last week, a district court in the Northern District of California denied TransUnion LLC’s motion to decertify a Fair Credit Reporting Act class action that was certified prior to the Supreme Court’s 2016 Spokeo ruling.  The class action case accused TransUnion of including inaccurate information on its consumer reports as well as failing to comply… Continue Reading

Judge Grants Summary Judgment for Bank of America in Putative FCRA Disclosure and Authorization Class Action

Posted in ALL CFS Blog Entries, Background Screening, Credit Reporting & Data Brokers
On October 13, Judge Christina A. Snyder of the United States District Court for the Central District of California granted summary judgment in favor of Bank of America and other defendants in a putative Fair Credit Reporting Act class action.  In Robert Berrellez v. Pontoon Solutions, Inc. et al., No. 2:15-cv-01898, the plaintiff alleged that… Continue Reading

District of Arizona Grants Summary Judgment to JPMorgan Chase on FCRA Background Screening Class Action

Posted in ALL CFS Blog Entries, Background Screening
In a case with important positive implications for banks conducting federally-required background checks on job applicants and employees, in Amanda Mix v. JPMorgan Chase, No. 2:15-cv-01102-JJT, the United States District Court for the District of Arizona granted JPMorgan Chase’s summary judgment motion on Plaintiff’s background screening class action. Plaintiff claimed that Chase violated the Fair… Continue Reading

Illinois Court Refuses to Dismiss Case After Tender of Monetary Relief as Courts Continue to Wrestle with Campbell-Ewald Aftermath

Posted in ALL CFS Blog Entries, Background Screening, Credit Reporting & Data Brokers
In Practice Management Support Services v. Cirque Du Soleil, Inc., the United States District Court for the Northern District of Illinois denied the defendants’ motion for summary judgment that followed a Rule 67 motion to deposit $15,000 to moot the plaintiff’s claim for relief under the Telephone Consumer Protection Act.  The plaintiff seeks, on behalf… Continue Reading

Lyft Avoids FCRA Class Action on Spokeo Grounds

Posted in ALL CFS Blog Entries, Background Screening
Lyft Inc. avoided a putative background screening class action over alleged privacy violations on Spokeo grounds last week. In the putative class action, the plaintiff driver alleged that Lyft failed to comply with the Fair Credit Reporting Act when it included “extraneous information” in its FCRA disclosure.  In addition, the plaintiff claimed that Lyft failed to… Continue Reading

Illinois Appellate Court Reverses Ruling in Favor of Neiman Marcus in Background Check Case

Posted in ALL CFS Blog Entries, Background Screening, Credit Reporting & Data Brokers
On September 27, the Illinois Court of Appeals reversed a ruling in favor of Neiman Marcus, finding that the department store violated the Illinois Employee Credit Privacy Act, 820 ILCS 70/1 et seq., when it ran background checks on potential employees.  The Act prohibits an employer from inquiring into a potential employee’s credit history, and… Continue Reading

Court Certified FCRA Class Over Spokeo Objections

Posted in ALL CFS Blog Entries, Background Screening, Featured Posts
GavelA 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

DISH Network Agrees to Settle Fair Credit Reporting Act Claims

Posted in ALL CFS Blog Entries, Background Screening
DISH Network, LLC and DISH Network Service, LLC have agreed to pay $1.75 million to settle class action claims that they violated certain provisions of the Fair Credit Reporting Act related to ordering consumer reports for employment purposes.  The December 4, 2012 complaint alleged that DISH required companies contracted to install DISH products to obtain… Continue Reading

Florida Federal Court Denies Motion to Dismiss FACTA Class Action Under Spokeo

Posted in ALL CFS Blog Entries, Background Screening, Credit Reporting & Data Brokers
On August 29, a Florida federal court rejected a motion to dismiss filed by Doctor’s Associates, Inc., doing business as Subway, which relied on the U.S. Supreme Court’s recent decision in Spokeo v. Robins in a Fair and Accurate Credit Transactions Act (“FACTA”) putative class action.  Plaintiff Shane Flaum claimed that Subway violated FACTA by… Continue Reading

Recent CFPB Supervisory Highlights Address FCRA Compliance Issues

Posted in ALL CFS Blog Entries, Background Screening, Credit Reporting & Data Brokers, State Attorneys General, CFPB, & FTC
The Consumer Financial Protection Bureau has continued to address FCRA-related compliance issues in its most recent Supervisory Highlights publications from March and June 2016.  The Supervisory Highlights once again reiterate the importance of FCRA compliance for a broad spectrum of FCRA-regulated entities, including mortgage originators, furnishers of consumer information, and nationwide specialty consumer reporting agencies… Continue Reading

Join Us at the National Association of Professional Background Screeners Annual Conference

Posted in ALL CFS Blog Entries, Background Screening, CFS Events
We are pleased to announce that Troutman Sanders partners David Anthony, Cindy Hanson, and Ron Raether will be featured speakers at the upcoming National Association of Professional Background Screeners (NAPBS) Annual Conference, to be held in Palm Desert, California on September 18-20. On Monday, September 19, David and Ron will speak on a panel entitled… Continue Reading

Northern District of Illinois Holds Third-Party Disclosure Required for FCRA Claim Under § 1681e(b)

Posted in ALL CFS Blog Entries, Background Screening, Credit Reporting & Data Brokers
Earlier this month, a federal court in the Northern District of Illinois granted a motion to dismiss a claim under 15 U.S.C. § 1681e(b), finding that a credit score purchased by the plaintiff was not a consumer report under the Fair Credit Reporting Act because it was not disclosed to any third party.   The plaintiff… Continue Reading

Sprint Agrees to Individual Settlement in Proposed Background Screening Class Action

Posted in ALL CFS Blog Entries, Background Screening
Earlier this month, Sprint settled, on an individual basis, a proposed FCRA class action accusing the telecommunications provider of asking consumers to waive privacy rights in its consumer disclosure forms. Specifically, the plaintiff claimed that the disclosure form Sprint used was not in a document that “consists solely of the disclosure” as required under 15… 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

Join Us at the Institute of Continuing Legal Education in Georgia’s Class Actions Seminar

Posted in ALL CFS Blog Entries, Auto Finance, Background Screening, CFS Events, Credit Reporting & Data Brokers, Debt Buyers & Collectors, Mortgage Lenders & Servicers
We are pleased to announce that Troutman Sanders partner Cindy Hanson will be a featured speaker at the Class Actions seminar, offered by the Institute of Continuing Legal Education in Georgia, on Friday, September 2. Cindy will speak on a panel entitled “Offers of Judgment and Mootness after Campell-Ewald,” where she will discuss the effects… Continue Reading

California Federal Judge Approves $2.4M Settlement Against SoFi

Posted in ALL CFS Blog Entries, Background Screening, Credit Reporting & Data Brokers, Debt Buyers & Collectors
The United States District Court for the Northern District of California entered an order on August 9, approving a $2.4 million settlement between Social Finance Inc. (“SoFi”) and a class of nearly 11,000 consumers for alleged violations of the Fair Credit Reporting Act.    In Heaton v. Social Finance Inc., the named plaintiffs alleged that SoFi,… Continue Reading

Background Screening Class Certified in Obsolete Information Case

Posted in ALL CFS Blog Entries, Background Screening
On July 26, a Northern District of California judge certified a class of applicants who claimed that S2Verify, a background check company, included obsolete criminal information on their background reports in violation of the Fair Credit Reporting Act.  In certifying the class, the Court found that the alleged harm was sufficient under the U.S. Supreme… Continue Reading

Spokeo-Based Motion to Dismiss Filed in Pennsylvania Federal Court

Posted in ALL CFS Blog Entries, Background Screening
In Long v. Southeastern Pennsylvania Transportation, the named plaintiffs applied for positions as bus operators with the Southeastern Pennsylvania Transportation Authority (“SEPTA”).  SEPTA allegedly extended each of the plaintiffs a conditional offer of employment, which was contingent upon a background check.  In each instance, the plaintiffs disclosed the existence of a drug conviction to SEPTA. … 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

Supplemental Briefs Submitted to the Ninth Circuit for Decision in Spokeo Case

Posted in ALL CFS Blog Entries, Background Screening, Cyber Security, Information Governance & Privacy
After the Supreme Court vacated and remanded the Ninth Circuit’s decision in Spokeo, Inc. v. Robins, the parties again appeared before the lower court, arguing over whether a purely technical violation of the Fair Credit Reporting Act is sufficient to satisfy the concreteness requirement for Article III standing.   As we previously reported, on May 16,… Continue Reading