Credit Reporting and Background Checks

Berger Montague’s Credit Reporting and Background Checks Practice Group litigates on behalf of consumers nationwide to protect them against violations of their rights under the Fair Credit Reporting Act and other consumer protection laws that protect consumers from inaccurate, unfair, or discriminatory credit reports or background checks.

The Fair Credit Reporting Act is a federal law that governs credit reports, background checks, and many other reports containing information about individuals.  Potential and current employers and creditors are relying more and more on background checks and credit reports when making hiring and firing decisions, and the consumer reporting agencies that prepare the reports are often more concerned with profits than with accuracy.  We are committed to ensuring that credit report and background check information is accurate and that it only be sold and used for legal purposes.

Berger Montague is dedicated to protecting consumers and ensuring that consumers receive justice when their rights have been violated by employers, consumer reporting agencies, and debt collectors.  The attorneys in the Credit Reporting and Background Checks Practice Group team are dedicated to protecting consumers’ rights and privacy.  We are highly experienced in effectively litigating these claims.  We have successfully represented hundreds of thousands of consumers across the country and have achieved relief worth millions of dollars on behalf of our clients.

Frequently Asked Questions

What is the Fair Credit Reporting Act?

The Fair Credit Reporting Act (“FCRA”) is a federal law that regulates certain types of reports that contain information about consumers.  The FCRA covers traditional credit reports plus employment background checks and virtually any other sale of data about individuals.  The scope of the FCRA is very broad and it regulates reports prepared to evaluate consumers for employment, credit, insurance, and other similar purposes.

The FCRA contains many consumer protections.  The statute requires that “consumer reporting agencies” (which is what the FCRA calls background check companies and credit reporting agencies) use reasonable procedures to assure maximum possible accuracy in their reports.  The law also restricts the sale of reports to people who have a legally acceptable reason for receiving the reports.

The FCRA also requires that a consumer reporting agency reinvestigate any disputed information free of charge.  The FCRA also allows individuals to file lawsuits against the users or creators of a report if the FCRA’s rules are not followed.  It provides for actual damages, punitive damages, statutory damages, and attorneys’ fees and costs.

What is a Consumer Reporting Agency?

Consumer reporting agencies include a wide range of companies that compile reports about people for credit, employment, housing, and other purposes.  They may also be called background check companies, tenant screening companies, credit reporting agencies, or credit reporting bureaus.  Experian, Equifax and TransUnion are some of the largest and best known credit reporting agencies.  The Consumer Financial Protection Bureau publishes a list of specialty consumer reporting agencies at http://files.consumerfinance.gov/f/201604_cfpb_list-of-consumer-reporting-companies.pdf.  All of these agencies are obligated to follow the FCRA’s rules.

How Can You Monitor Your Credit?

We are always happy to help concerned consumers obtain a copy of their report.  The easiest way to monitor your credit is to request a free credit report from one of the three major bureaus – Equifax, Experian, and TransUnion.  You are entitled to a free report from each every year, so if you do only one bureau at a time, you can request a report every four months.  You can request your free reports online at www.annualcreditreport.com, or you can contact us and we will help you obtain a copy of your report.

You can also monitor your bank and credit card statements for suspicious activity, or sign up for a credit monitoring service to help detect fraud, and identity theft.

What is a Credit Score & How Can You Improve It?

A credit score is a 3-digit number that relates to how likely a consumer is to be able to repay debt, and is based on things like how often that consumer makes payments on time, and how many accounts are in good standing.

A few steps you can take to ensure your credit score is as high as it can be include: pay your bills and loan payments on time every month, minimize your debt, don’t carry a balance on your credit cards, don’t have too many lines of credit open, and monitor your credit.

Who Can Pull A Consumer Report on You?

Employers and potential employers can access your consumer report, but only with your written permission.  In very limited circumstances, an employer could obtain a background check without permission, but only if it is doing so to investigate misconduct by a current employee, and even then, the employer is required to give the employee notice of the report if it is going to take an adverse action, such as terminate the employee.

Other entities can access your report without permission, at the time you are entering into a transaction or credit relationship with them, such as banks, credit card companies, and landlords, but they are required to have a permissible purpose to do so.

How Can You Fix a Mistake on Your Report?

Our firm is always happy to talk with consumers who are concerned about an error on a report.

If you become aware that a consumer reporting agency has produced a report on you that is incorrect or contains errors, you have a right to dispute the contents of the report.  Under the FCRA, reporting agencies are required to reinvestigate any disputed information within 30 days of receiving a dispute.  We can help you with the dispute process.

Many consumer reporting agencies have forms you can use to submit a dispute, or you can send a letter that describes the dispute.  To ensure the agency receives your dispute, you should send it by certified mail with a return receipt requested, and you should attach copies of any documents that show the information is incorrect.  After completing its reinvestigation, the agency is required to inform you of the results.

If you find that incorrect information is popping up on reports from different consumer reporting agencies, the problem might not be with the company, but with the government’s records.  In order to fix the problem, you need to first figure out exactly which government agency is providing the inaccurate information, by requesting a copy of your consumer file from the consumer reporting agency.  Once you see who the source of the inaccurate information is, you should contact that office with the correct information and hopefully the problem can be corrected at the source.

Is it Legal to Discriminate Against Someone Based on Criminal Background?

Many states have laws protecting people with criminal records from discrimination.  If you applied for a job, apartment, or credit, and were denied based on your criminal background, you may have a claim for money damages.

It is important to also know that consumer reporting agencies can only report to employers two categories of criminal information: (1) convictions, and (2) non-convictions which are within the last seven years of the date of the report. It illegal to report a non-conviction (such as a dismissed charge, a non-criminal traffic citation, or an arrest) that is older than seven years.

If an employer is going to use an individual’s background check as a basis for an adverse employment-related decision, such as not hiring, terminating, or demoting, the employer must provide notice to the individual, and include a copy of the background check, prior to taking that adverse action.

It is legal for employers to use criminal background information to make employment decisions, but only within the limits of the laws.

What are Some Examples of Berger Montague Attorneys’ Credit Reporting and Background Check Cases?

Rubio-Delgado v. Aerotek, Inc., No. 16-cv-1066 (S.D. Ohio).  FCRA class action, alleging violations by employer regarding the disclosure & authorization provided to applicants and current employees, as well as the provision of notice to applicants and employees if an adverse action was based on a background check, resulting in a $15 million settlement.

Hillson v. Kelly Services, Inc., No. 15-cv-10803 (E.D. Mich.).  FCRA class action, alleging similar violations by employer as those in Aerotek, resulting in a $6.749 million settlement.

Ernst v. DISH Network, LLC & Sterling Infosystems, Inc., No. 12-cv-8794 (S.D.N.Y.).  FCRA class action, alleging violations by employer regarding the disclosure & authorization provided to contractors, resulting in a $1.75 million settlement with employer.

Nesbitt v. Postmates, Inc., No. CGC-15-547146 (Cal. Super. Ct., San Fran. Cnty.).  FCRA class action, alleging violations by employer regarding the disclosure & authorization provided to applicants and current employees, as well as the provision of notice to applicants and employees if an adverse action was based on a background check, resulting in a $2.5 million settlement.

Halvorson v. TalentBin, Inc., No. 15-cv-5166 (N.D. Cal.).  FCRA class action, alleging violations by online data aggregator regarding its obligations to notify users of its profiles about FCRA regulations, and to obtain certifications from those users regarding compliance with the FCRA, resulting in a $1.15 million settlement.

Legrand v. IntelliCorp Records, Inc., No. 15-cv-2091 (N.D. Ohio).  FCRA class action, alleging violations by consumer reporting agency regarding accuracy of its reports, resulting in a $1.1 million settlement.

What Qualities Set Berger Montague Apart From Other Firms?

We are one of the largest plaintiff-side law firms in the U.S.  We handle individual and class action cases.  With more than 60 attorneys, we have plentiful resources to staff large and complex cases as well as smaller but equally important matters.  Having a deep bench of attorneys is critical to effectively litigating our class actions, which generally take several years to resolve.

Berger Montague is the rare class action firm that has tried and won multiple class action jury trials.  We have the expertise to bring our cases to trial if meaningful settlements cannot be reached earlier in the litigation.

We have a 45-plus year history, much longer than the vast majority of our competitors.  With our thorough understanding of class actions, we litigate our cases from a position of strength, using time-tested approaches and insights.  Throughout our decades-long history, we have cultivated strong relationships with other class action firms, with whom we partner in many of our cases.

Our commitment to Fair Credit Reporting Act cases is longstanding and we have a demonstrated track record of success in litigating these cases.  Department Chair E. Michelle Drake is a Harvard Law School graduate who speaks nationally about Fair Credit Reporting Act cases.  She sits on the board of the National Association of Consumer Advocates, has authored a book chapter on background checks, and has served as lead counsel in dozens of Fair Credit Reporting Act matters. Her class action cases have resulted in recoveries valued in excess of $150 million for her clients.

Judicial Praise Regarding Berger Montague’s Credit Reporting and Background Checks Team

From Judge Harold E. Kahn, Dep’t 302, Superior Court of Cal., San Fran. Cnty.:

You’re very articulate on this issue. … Obviously, you’re very thoughtful and you have given it a great deal of thought. …You are extraordinarily impressive. …You have allayed all of my concerns and have persuaded me that this is an important issue, and that you have done a great service to the class.  And for that reason, I am going to approve your settlement in all respects… And I congratulate you on your excellent work.

Nov. 7, 2017, Final Approval Hearing, Nesbitt v. Postmates, Inc., No. CGC-15-547146.

 

From Judge Laurie J. Michelson, United States District Court, E.D. Mich.:

Counsel’s quality of work in this case was high.  The Court has been impressed with counsel’s in-court arguments.  And counsel has provided the Court with quality briefing as well.

Aug. 11, 2017, Opinion & Order on Mtn. for Atty. Fees, and Mtn. for Final Approval, Hillson v. Kelly Services, Inc., No. 15-cv-10803.

 

From Magistrate Judge Terence P. Kemp, United States District Court, S.D. Ohio:

The parties in this case are represented by counsel with substantial experience in class action litigation, and FCRA cases in particular. … Class Counsel are experienced and knowledgeable in FCRA litigation, are skilled, and are in good standing.

June 30, 2017, Report & Recomm’n. on Final Approval, Rubio-Delgado v. Aerotek, Inc., No. 16-cv-1066.

No Fees Without Recovery

Berger Montague’s class actions are brought on a contingent fee basis.  That means plaintiffs and the class do not pay out-of-pocket attorneys’ fees or litigation costs. Attorneys’ fees and costs are paid from the recovery obtained for the class, subject to court approval.

Contact Us to Inquire About a Credit Reporting or Background Checks Individual Lawsuit or Class Action

We invite you to contact us about a potential case.  Please fill out the contact form to the right.  You may also contact our Credit Reporting and Background Checks Act team of attorneys directly.  The Department Chair, E. Michelle Drake, can be reached at emdrake@bm.net or (612) 594-5933.