Company Pays Over 13 Million Dollars to Settle Suit Alleging Background Check Reports Were Sold to Debt Collectors

A U.S. company providing risk management solutions has agreed to pay $13.5 million and overhaul its background check search product to settle a national class action suit that claimed the firm sold background check reports to debt collectors without following consumer protection laws, according to a report in the Dayton (OH) Daily News that cites the Law360 website. The full story is available at http://www.daytondailynews.com/news/business/lexisnexis-pays-135m-to-settle-suit/nWxJQ/.

Citing a Law360 article, the Dayton Daily News reported the dispute centered on whether background check reports used by debt collectors to track down consumers were “consumer reports” as defined by the Fair Credit Reporting Act (FCRA), a federal law that regulates the collection, dissemination, and use of consumer information such as the data used in background check reports. Under the proposed settlement, approximately 31,000 class members will receive a payment from the $13.5 million deal.

Law360 also reports the company – which did not admit any wrongdoing – will separate its background check search product into two product lines with separate sets of information for different uses as part of the settlement. One product will fall under the FCRA’s “consumer report” definition, according to Law360. The full Law360 report is available at http://www.law360.com/classaction/articles/424525/lexisnexis-pays-14m-in-suit-over-reports-sold-to-debt-cos- (Registration required to read article).

Employment Screening Resources® (ESR) – ‘The Background Check Authority®’ – is a nationwide background screening provider accredited by the National Association of Professional Background Screeners (NAPBS®). For more information about background check solutions from ESR, visit http://www.esrcheck.com or call Toll Free 888.999.4474.

Sources:

http://www.daytondailynews.com/news/business/lexisnexis-pays-135m-to-settle-suit/nWxJQ/

http://www.law360.com/classaction/articles/424525/lexisnexis-pays-14m-in-suit-over-reports-sold-to-debt-cos

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