Tag: Inaccurate Background Checks

CRA Reaches $4 Million Settlement to End Class Action Lawsuit Over Inaccurate Background Checks A background check provider has agreed to a $4 million settlement to end a class action filed by a consumer who alleges he was banned from a major online homestay marketplace due to an inaccurate background check. The lawsuit alleges that the company violated the Fair Credit Reporting Act (FCRA) by “either willfully or negligently reporting as felonies crimes that Minnesota law deems to be misdemeanors” and by misrepresenting the same non-violent offenses as violent. The motion for preliminary approval filed by the plaintiff’s counsel states that the background check provider has agreed to settle these claims. The settlement agreement includes a $4 million non-reversionary common fund that will be distributed to class members who suffered from inaccurate background checks and choose to settle their claims in the form of cash payments. The case issue began in July 2020, when the plaintiff alleges that he attempted to rent a place through the online marketplace, which then ordered a background check on him from the defendant. This background check indicated that the defendant had been convicted of a felony categorized as “violent.” However, the plaintiff denies having ever been convicted of such a felony, violent or otherwise. The plaintiff complained to the background check provider, who corrected the mistake, but the plaintiff had already been banned for life from the online rental platform. The plaintiff’s wife also attempted to rent a place through the platform, and the background check came back with the same information, which, upon complaint, was corrected. As a result, the plaintiff maintains that the issue was not an isolated incident but shows a systemic issue. Because of this, the plaintiff brought a complaint on behalf of two proposed classes, including a “deemed misdemeanor” class consisting of those whose consumer reports misrepresented misdemeanors as felonies and an “inaccurate offense characterization” class consisting of offenses that were misdescribed as violent. Under the proposed settlement, the background check provider maintains that it was not in violation of any laws and denies liability. However, they agree to settle in order to avoid the burdens and costs of further litigation. The settlement would create a common fund of $747,000 for the deemed misdemeanor class and $3,253,000 for the inaccurate offense characterization class. This case further shows the importance of accurate background check reporting and partnering with a provider you can trust. Incorrect reporting can lead to noncompliance, misguided decisions, and potential liability. Ready to learn more about Pre-employ’s accurate and reliable background checks? Speak to a Sales Rep today. Source

Tag: Inaccurate Background Checks

CRA Reaches $4 Million Settlement to End Class Action Lawsuit Over Inaccurate Background Checks

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