Plaintiff Alleges Obtaining Credit Report for Marketing Purposes is Not Permissible.

Last month, on February 16, 2021, the United States District Court Middle District of Florida Tampa Division denied a motion to dismiss by Defendant when Plaintiff claimed that Defendant allegedly violated the federal Fair Credit Reporting Act (FCRA). Plaintiff claims that Defendant requested their credit report from two Consumer Credit Reporting Agencies without a “permissible purpose” under the FCRA. 

Plaintiff alleged the Defendant had obtained their credit report without their consent for “marketing purposes” which is not a permissible purpose under the FCRA. The FCRA prohibits a person from using or obtaining a consumer report for any purpose unless “the consumer report is obtained for a purpose for which the consumer report is authorized to be furnished” under the FCRA and “the purpose is certified in accordance” with the FCRA.

Plaintiff alleged that Defendant engages in consumer lending of high-interest bearing loans and had obtained Plaintiff’s credit report two times without her consent to assess whether she would be a good loan prospect for Defendant’s marking efforts.

The United States District Judge Kathryn Kimball Mizelle stated in the order that the court must accept the conduct is not a permissible purpose as true at this point under the FCRA. She also stated that “Defendant fails to make any argument that it obtained Plaintiff’s credit report for a permissible purpose or under a reasonable interpretation of the statute. Accepting Plaintiff’s allegations as true and viewing them in the light most favorable to her, the Court concludes that Plaintiff has adequately pleaded enough facts to proceed past the motion-to-dismiss stage.”

In 1970, Congress enacted the FCRA to promote the accuracy, fairness, and privacy of consumer information contained in the files of consumer reporting agencies (CRA’s), protect consumers from the willful and/or negligent inclusion of inaccurate information in their consumer reports, and regulate the collection, dissemination, and use of consumer information, including consumer credit information. 

In background screening, lawsuits for alleged violations of the FCRA have become very common and can result in monetary awards in thousands or even millions of dollars. In 2020, FCRA lawsuit settlement proposals reached up to an $18 million. According to the provider Employment Screening Resources® (ESR), FCRA lawsuits will continue to serve as a legal compliance signposts for employers conducting background checks on job applicants. 

Plaintiff Brings Claim Against Employer

A Plaintiff by the name Gennaro Mattiaccio II was terminated by Defendant DHA Group for alleged misconduct. On July 21st, 2020, The United States District Court, District of Columbia issued an opinion in Matticcio v. DHA Group., Inc. that said the Plaintiff had standing to pursue claims of Fair Credit Reporting Act (FCRA) violations against his former employee. The DHA Group used a background check that was used to justify Plaintiff Maticcio’s termination from work.

Mattiaccio II claims that these background checks were retaliation for a complaint he had filed against DHA Group. Typically, pre- and post- employment background checks that investigate employee misconduct are exempt from the FCRA.

Mattiaccio II brought two FCRA claims: Defendant lacked proper authorization to perform the background checks, since they were not clearly formatted and Plaintiff did not authorize a post-employment background check and was given neither a summary of rights or an opportunity to review his report before his termination. 

District Judge Colleen Kollar-Kotelly wrote an opinion that has been cause of the latest decision in almost a decade-long dispute between the two parties. Judge Koller-Kotelly granted in part and denied in part the Defendant’s Motion for Summary Judgement for lack of standing under Article III of the U.S. Constitution.
She states that the Plaintiff has a standing on claims that he did not authorize the post-employment background check but he cannot bring in the claim that he did not authorize the pre-employment background check. She states that he also has a claim that he was not provided a copy of the report or his summary of rights before the adverse action was taken against him. The case has now been taken to court. 

The FCRA promotes the accuracy, fairness, and privacy of consumer information contained in the files of Consumer Reporting Agencies (CRA’s), protects consumers from the willful and/or negligent inclusion of inaccurate information in their consumer reports, including consumer credit information. 

Employment Screening Resources (ESR) wants to remind us that allegations made in a lawsuit are not proof that a business or individual violated any law, rule, or regulation. The allegations written in this blog are not factual at this current time. 

If you feel that your employer has put a violation wrongfully against you, contact us to take a look at your case and we will provide you with information and let you know if you have a claim.