Background Check Company Faces Lawsuit for FCRA Violation

A Georgia background check company is currently facing a lawsuit for violating the Fair Credit Reporting Act (FCRA). The case against Facts on Demand has brought considerable attention to the critical importance of FCRA compliance in the hiring process.

The FCRA mandates strict guidelines for background check companies to protect individuals’ privacy and ensure the accuracy of information provided to employers. Non-compliance can severely impact job applicants, affecting their employment opportunities and reputations.

This article explores the lawsuit against Facts on Demand, a prominent background check company in Georgia. We will discuss how this case can impact employers and job applicants, focusing on:

1. The details of the lawsuit and alleged FCRA violations.
2. Potential consequences for non-compliant background check practices.
3. Best practices for ensuring adherence to FCRA regulations.

By understanding these elements, employers can better navigate the complexities of background checks while protecting candidates’ rights.

The Facts on Demand Lawsuit: A Case of Severe FCRA Violation

The lawsuit centers around the company’s practice of revealing information that is not allowed to be disclosed to potential employers, such as:

• Arrests without convictions
• Non-conviction criminal records that go beyond the seven-year limit

These actions violate the time restrictions set by the FCRA, which state that negative information should only be reported for a maximum of seven years unless specific exceptions exist.

Plaintiffs’ Arguments

The individuals bringing the lawsuit have put forward several vital points:

1. They claim that the outdated and forbidden information shared by Facts on Demand damages their chances of finding employment.
2. They highlight the harm caused to their reputations due to inaccuracies in their background reports.
3. The lawsuit highlights how false information can lead to unfair job rejections and long-term career setbacks.

Facts on Demand’s Defense Strategy

In response to these allegations, Facts on Demand has outlined their defense strategy:

1. The company states that it has interpreted the rules differently regarding reporting limitations for civil lawsuits, arrest records, and adverse information.
2. They argue that certain exceptions specified in the FCRA might justify their actions.

The Importance of Following FCRA Guidelines

This ongoing legal battle reminds us of how important it is for background check companies to strictly adhere to FCRA guidelines. Any misinterpretation or violation of these rules can have significant consequences for individuals and employers.

Consequences of Non-Compliant Background Check Practices: Lessons for Employers

Legal and Financial Consequences

Non-compliance with FCRA regulations can lead to significant repercussions:

• Fines and penalties: Organizations may face statutory penalties ranging from $100 to $1,000 per violation.
• Lawsuits: Class-action lawsuits can result in substantial financial liabilities and damage the company’s reputation.
• Operational impact: Legal battles can divert resources from core business activities, affecting productivity.

Rights of Individuals

Individuals affected by inaccurate background reports have specific rights under the FCRA:

• Dispute inaccuracies: Individuals can dispute errors in their background reports with the reporting agency.
• Right to know: Applicants are entitled to know what information was reported about them.
• Adverse action notification: Employers must notify individuals when they plan to deny employment actions based on the background report.

Damages for Victims

Victims of FCRA violations can seek various forms of damages:

• Statutory damages: Compensation for each instance of non-compliance, typically between $100 and $1,000.
• Punitive damages: Additional amounts awarded to punish egregious violations and deter future misconduct.
• Legal fees: Reimbursement for attorney fees and court costs incurred during legal proceedings.

Adhering to FCRA compliance protects organizations from legal repercussions and ensures fair treatment of job applicants.

Best Practices for Employers and Background Check Companies

Employers must prioritize FCRA compliance best practices to safeguard their hiring processes. Key steps include:

• Obtaining proper consent: Always secure written permission from applicants before initiating background checks.
• Providing required disclosures: Inform candidates about the scope of the background check and their rights under the FCRA. This step includes supplying them with a copy of A Summary of Your Rights Under the Fair Credit Reporting Act.
• Adverse Action Process: If intending to take adverse action based on report findings, employers should follow a two-step process:

1. Pre-adverse action notice: Provide the individual with a copy of the report with the notification that you are considering adverse action.
2. Final adverse action notice: After allowing time for dispute or explanation, send a final notice when you decline a job application.

Importance of Partnering with Reputable Providers

Choosing an FCRA-compliant background check company is crucial. Consider these factors:

• Accuracy and legal adherence: Choose a provider that emphasizes precise reporting and adherence to legal standards.
• Range of services: Ensure the provider offers comprehensive services, including criminal history checks, employment verification, and professional license verifications.
• Industry-specific solutions: Select companies that tailor their offerings to specific industries, including staffing, construction, retail, and volunteer organizations.

By following these guidelines and partnering with reputable providers, employers can ensure they meet their FCRA obligations effectively.

The lawsuit against Facts on Demand highlights a critical issue in the industry: the importance of strict adherence to FCRA guidelines. The Georgia background check company’s failure to comply with FCRA regulations resulted in legal action that damaged the reputations and employment prospects of the individuals involved.