Fair Credit Reporting Act (FCRA)

Written By ESR News Blog Editor Thomas Ahearn

On December 4, 2020, the U.S. Court of Appeals for the Eleventh Circuit held that a Consumer Reporting Agency (CRA) that provided consumer reports about job applicants complied with the “maximum possible accuracy” standard required by the federal Fair Credit Reporting Act (FCRA) that regulates background checks in America.

Under the FCRA § 1681e(b), CRAs must “follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.” The Court of Appeals ruled the report from the CRA was factually accurate with instructions on how to further confirm the report’s accuracy.

The plaintiff in the lawsuit was a father who volunteered to coach his son’s Little League baseball team and authorized a background check from a CRA that included a sex-offender records search. The search returned a sex-offender record that matched the plaintiff’s name and the CRA prepared a report for the Little League.

The report stated: “This Record is matched by First Name, Last Name ONLY and may not belong to your subject. Your further review of the State Sex Offender Website is required in order to determine if this is your subject.” The CRA also noted that the Little League might “conclude that the records do not belong to” the applicant.

The CRA sent the plaintiff a letter informing him that he shared “the same name with a known criminal or registered sex offender” and the record would be sent to Little League, noting that the “Little League is aware this record may not be yours” and explaining the Little League was “committed” to investigating the record further.

The plaintiff – who was aware that the sex offender record was related to his father who had the same first and last name as him – called the CRA and Little League to explain the situation. Ultimately, he decided not to coach his son’s team because of the humiliation and changed his last name to avoid further confusion with his father.

Soon after, the plaintiff sued the CRA for failing to “follow reasonable procedures to assure maximum possible accuracy” in violation of the FCRA. A district court found that the plaintiff failed to establish two essential elements of his case: that the report was inaccurate, and that it caused him harm. This decision led to the appeal.

The Appeals Court affirmed the district court’s decision. The consumer report may have harmed the plaintiff “not because of any inaccuracies, but because it brought to light the difficult past of his estranged father. But an accurate report is not actionable under the Act, no matter how embarrassing or hurtful it may prove.”

The Appeals Court found that the consumer report from the CRA was factually correct by stating that a registered sex offender shared the same first and last name as the plaintiff, did not wrongfully attribute that record to the plaintiff, and explained that the matching record might not belong to the plaintiff at all.

Enacted in 1970, the FCRA promotes the accuracy, fairness, and privacy of consumer information contained in the files of CRAs, protects consumers from the willful and/or negligent inclusion of inaccurate information in their consumer reports, and regulates the collection, dissemination, and use of consumer information.

Employment Screening Resources® (ESR) – a global background check provider that was named the number one background screening firm in 2020 by HRO Today – offers white papers on how employers may avoid FCRA lawsuits and how CRAs may avoid FCRA lawsuits. To learn more about ESR, visit www.esrcheck.com.

NOTE: Employment Screening Resources® (ESR) does not provide or offer legal services or legal advice of any kind or nature. Any information on this website is for educational purposes only.

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