Background check company offers to settle over ‘inaccurate’ reports

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A major business background checking company has offered to pay out nearly $19 million after three class action lawsuits were brought against it over allegations of inaccuracy of reports they provided to prospective employers.
Putative class action lawsuits were brought against two divisions of the US-based Verisk Analytics risk assessment company, including Intellicorp Records Inc.

The lawsuits alleged the two offshoot companies – which deliver consumer reports, including background checks, to clients – violated the Fair Credit Reporting Act (FCRA) by failing to take reasonable measures to ensure the accuracy of background check reports.

Alleged failings accused the companies of violating the FCRA by providing incorrect, outdated or incomplete ‘safe hiring’ information to potential employers and neglecting to provide certain consumers with copies of their consumer reports before delivering them to prospective employers.

In the class actions, one plaintiff alleged a prospective employer was sent her background check report which she said failed to include public record information, but that included out-of-date information.

Another plaintiff who said he did not have a criminal record accused Intellicorp of including details of other individuals’ criminal history in his report: a mistake he says falsely identified him as a criminal during the employment screening process and eliminated him from being short-listed for the position.

A ‘Criminal SuperSearch’ result in the background check reports was designed to detail arrests or convictions between April 16, 2010 and Sept. 16, 2013.

The FCRA requires consumer reporting agencies to act fairly towards consumers with regard to the collection, dissemination and use of their consumer and credit information.

The class action alleged the Consumer Reporting Agencies (CRAs) – another term for background check firms – “failed to use ‘reasonable procedures’ necessary to ensure the ‘maximum possible accuracy’ of the reports they sell.”

While the defendants denied the allegations and insisted they complied with the FCRA, they agreed to settle at $18.6 million: equal to the monetary value of free consumer reports to all putative Class Members.

They also agreed to update and improve their reporting policies to maximise the accuracy of their Employment Screening reports.

Verisk Analytics and Intellicorp Records Inc. did not respond for requests for comment regarding this story, by time of publication.