Written By Digital Content Editor Thomas Ahearn

A provider of outsourced labor to companies has agreed to pay $225,000 to settle a class action lawsuit for allegedly violating the federal Fair Credit Reporting Act (FCRA) by failing to provide pre-adverse action notices when using background check reports to take adverse employment actions against applicants and employees.

According to a report on TopClassActions.com, the plaintiff in the lawsuit alleged the defendant “violated the FCRA by failing to provide him with pre-adverse action notice that included a copy of his consumer report and written summary of his FCRA rights at least five days before rejecting him from an employment opportunity.”

Under FCRA Section 15 U.S.C. § 1681b(b)(3)(A)(i)(ii), employers intending to take any adverse action based in whole or in part on a background check report shall first provide to the subject of the report (i) a copy of the report and (ii) a copy of a document titled “A Summary of Your Rights Under the Fair Credit Reporting Act.” 

Plaintiff claimed the defendant took adverse action “based on the results of his consumer report without first providing him notice and a copy of the report. As a result, the plaintiff says he never saw what was included on his credit report and could not determine whether the information was accurate,” TopClassActions.com reported.

Class members who may be entitled to a cash payment from the FCRA settlement would include applicants for whom the defendant procured a consumer report for employment purposes that was used to take adverse employment action against them between June 1, 2016, and January 20, 2022, TopClassActions.com reported.

The FCRA 15 U.S.C. § 1681 was enacted by Congress in 1970 to promote the accuracy, fairness, and privacy of consumer information contained in the files of consumer reporting agencies, and to protect consumers from the willful and/or negligent inclusion of inaccurate information in their consumer reports, including credit reports.

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