According to an article from Law360, two Verisk Analytics business units have agreed to pay more than $18 million to settle proposed class action lawsuits alleging that the screening companies violated the Fair Credit Reporting Act (FCRA).
While the companies deny the allegations and mainatin that they complied with the FCRA, the proposed lawsuit alleges that Intellicorp Records and Insurance Information Exchange violated the FCRA in two ways: first, that the defendants violated the core “accuracy” provision of the FCRA, and second, that Intellicorp violated a provision requiring the companies to notify consumers “at the time” it furnishes and sells a consumer report to an employer. For more detailed information, keep reading below.
- Roe v. Intellicorp Records, Inc., Case No. 1:12-CV-02288
Jane Roe filed her case under a pseudonym. As alleged, she is a professional social worker with a Masters of Social Work degree. Years ago she was convicted of retail store theft on two separate occasions.
Intellicorp furnished background reports to two prospective employers, each of whom sought to hire Ms. Roe. Ms. Roe alleges that both of the reports issued by Intellicorp were inaccurate. Ms. Roe alleges that the first of these reports omitted material information about the reported charges, such as stating that the disposition date and description (among other items of information) were “Not Provided.” Ms. Roe alleges that, in the context of Intellicorp’s reports, the term “Not Provided” meant that the information was not available in Intellicorp’s database, and that Intellicorp’s records were not up-to-date because additional information was available in public records. Intellicorp issued the second report after Ms. Roe’s conviction was dismissed pursuant to California Penal Code § 1203.4, California’s “expungement” statute. Ms. Roe alleges that the second Intellicorp report failed to note the expungement and continued to disclose the charges in alleged violation of the FCRA.
Ms. Roe filed her action on April 16, 2012 in California Superior Court. Defendant removed the matter to federal court on May 18, 2012, and the matter was transferred to this Court on September 11, 2012. Ms. Roe’s complaint alleged violations of § 1681k as well as § 1681e(b).
- Thomas v. Intellicorp Records, Inc., Case No. 1:12-CV-02443
As alleged in his complaint, Mr. Thomas sought employment with Best Care Senior Services, a staffing agency, in August of 2012. Mr. Thomas consented to allow Best Care to review a background check concerning Mr. Thomas as part of his eligibility for employment. Mr. Thomas alleges that even though he has no prior criminal history, Intellicorp prepared and furnished a consumer report containing several reports of criminal arrests and convictions, and that, in reality, that information did not relate to Mr. Thomas, but instead was properly attributed to other individuals who are not Mr. Thomas.
Mr. Thomas further alleges that this common form of credit reporting problem – known in the industry as a “mixed file” or “mismerge” – resulted in a report in violation of 15 U.S.C. § 1681e(b), which falsely described Mr. Thomas as a criminal, thus disqualifying him from employment. Mr. Thomas also alleges that Intellicorp did not provide a copy of this report to Mr. Thomas or otherwise notify him that it intended to issue a report containing public record information before it provided the inaccurate report to Best Care Senior Services, in violation of 15 U.S.C. § 1681k. Mr. Thomas filed his case against Intellicorp on September 28, 2012.
- Johnson v. Insurance Information Exchange, LLC, Case No. 2:12-CV-1118
Mr. Johnson’s complaint also alleges a “mixed file” violation, in which Intellicorp’s affiliate Insurance Information Exchange (“IIX”), provided Mr. Johnson’s prospective employer with a criminal background report that included criminal history relating to another individual. Specifically, Mr. Johnson alleges that IIX reported that he had been convicted of “indecent assault and battery on child under 14 years of age” and “sexual abuse in the first degree,” and failed to provide notice that it had done so. Mr. Johnson alleged violations of 15 U.S.C. §1681k(a). Mr. Johnson added his claims to those of Mr. Thomas by way of an amended complaint filed on January 7, 2013.
- Plaintiffs’ Claims
The FCRA is a consumer protection statute that requires CRAs to “adopt reasonable procedures for meeting the needs of commerce for consumer … information in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of such information….” 15 U.S.C. §1681(b). Each of the Plaintiffs allege that Intellicorp violated the FCRA in two ways. First, Plaintiffs allege that Defendants violated 15 U.S.C. §1681e(b), the core “accuracy” provision of the FCRA. The § 1681e(b) claim alleges that the Defendants fail to use “reasonable procedures” necessary to ensure the “maximum possible accuracy” of the reports they sell. Each of the Plaintiffs allege that Intellicorp violated this provision when it issued inaccurate and incomplete reports about them to their prospective employers. 15 U.S.C. § 1681k(a)(1). Second, Plaintiffs allege that Intellicorp violated 15 U.S.C. §1681k(a)(1), a provision requiring Intellicorp to notify consumers “at the time” it furnishes and sells a consumer report to an employer. Defendants deny these allegations, and maintain that they complied with the FCRA.
According to Law360, the settlement provides substantial monetary and nonmonetary relief. These include cash disbursements by the defendants totaling $18.6 million, the monetary value of free consumer reports to all class members upon request, which a consumer reporting agency may charge up to $11.50 to provide. If only 10 percent of class members obtain their reports, the economic value would exceed $600,000, not including the economic value of corrected files used by class members to obtain employment,” the motion said.
Additionally, the settlement also provides for significant nonmonetary benefits. For example, Intellicorp has agreed to refrain from advertising the Criminal SuperSearch or other similar database product as an “Instant” product.
Also, Intellicorp will not make results available from a court records search unless and until a Single County Criminal or other appropriate individualized search is conducted, as more fully detailed in the Settlement Agreement.