As we often say at GroupOne Background Screening, “Know the rules, especially when it involves Fair Credit Reporting Act (FCRA).” Due diligence is always important. We ran across a recent case that showcases some agonizingly small mistakes involving FCRA forms. In this example, the mistake will cost the company money.
According to the complaint Kenn v. EasCare, LLC, the ambulance service company EasCare frequently conducted background checks when hiring. In January 2018, Nicole Kenn applied for a position. During the process, EasCare provided her with a disclosure and authorization form entitled “Consumer Report/Investigative Consumer Report Disclosure and Release of Information Authorization.”
The front of the form asked Nicole to acknowledge she understood EasCare would conduct a background check. It also noted this might include acquiring a “consumer report” or “investigative consumer report.” The back side of the form sought Nicole’s authorization for the company PT Research to provide the reports.
After signing the form, EasCare obtained the reports and she was eventually hired. Less than a year later, Nicole resigned and filed suit. Among her claims, she declared a class action for violations of the FCRA. She said EasCare had failed to comply stating a consumer report can only be obtained if the employee is provided “a clear and conspicuous disclosure” regarding the procurement of such a report “in a document that consists solely of the disclosure.”
EasCare moved to dismiss Nicole’s claims, and the Superior Court agreed. The Massachusetts Appeals Court reversed the ruling, noting there was indeed a violation of the FCRA. The court stated even though the front side of the document provided by EasCare contained the relevant disclosure, the back side contained a release. Therefore, Nicole was not provided with a document solely consisting of the disclosure.
The Appeals Court stated:
“Although the plaintiff may not be able to articulate actual damages arising from EasCare obtaining her consumer report by using a noncompliant disclosure form, the FCRA liability provision recognizes the injury to the consumer may not be measurable. Thus, in an action for a willful violation, the statute provides for the option of the plaintiff recovering actual damages caused by the FCRA violation or, if the plaintiff cannot prove actual damages, nominal damages between $100 and $1,000.”
The Appeals Court held that Nicole had standing to sue, and EasCare now faces the upcoming prospect of litigation, potential damages and attorneys’ fees.
As we tell our clients, be sure you read the FCRA carefully. Follow all requirements no matter how small. Failing to do so could put you in the always-messy situation of class action litigation.
Please do not hesitate to contact us with questions about the FCRA.