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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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

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