Since its enactment, there have been several high-profile FCRA violation cases, many of which have led to substantial fines and settlements for the companies involved. We’re going to take a look at 10 of the largest FCRA cases and their rulings. If you notice inaccuracies on your credit report and find yourself facing similar issues, the Fair Credit Reporting Act could help you take legal action and clear up the mistakes.
Enacted in 1970, the Fair Credit Reporting Act (FCRA) was established to keep consumers protected from incomplete or inaccurate information on their credit reports. Under the FCRA, consumers are given the right to know what information is on their credit report, and they are allowed to dispute anything inaccurate, erroneous, or outright false.
One of the three major credit reporting agencies, TransUnion, agreed to pay a $60 million settlement in 2020 to settle a class-action lawsuit filed on behalf of consumers that accused TransUnion of violating the FCRA. According to the lawsuit, TransUnion inaccurately linked consumers with folks that are on the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) list. The jury concluded that TransUnion failed to keep procedures in place to prevent this from happening.
Equifax, another of the three major credit reporting agencies, faced a settlement in 2013 that ended in them being ordered to pay $18.6 million to an Oregon woman after she sued the company for failing to fix inaccuracies she found on her credit report. This case shows how important the FCRA and consumer protections are, and shows how things can turn out from failing to comply with the law.
Experian, the final major credit reporting agency, agreed to settle a class-action lawsuit in 2014 by paying $16.6 million after being accused of violating the FCRA. This lawsuit claimed that Experian failed to properly investigate customer disputes that stated they provided inaccurate credit reports. This lawsuit and settlement showed the potential penalties for violating the FCRA and showcased how important it is to maintain accurate credit reports.
In 2015, BMW paid $3 million to settle allegations that its North American subsidiary used background checks in promotions and hiring without properly disclosing this information to applicants. This case demonstrated how important it is to follow the FCRA regulations regarding background checks on potential employees.
In 2016, banking giant Wells Fargo agreed to pay $2.7 million to settle a class action that alleged the bank violated the FCRA by not giving proper credence to customer disputes related to their credit reports. When you dispute errors on your credit report, the disputes need to be taken seriously, and this case proved that.
Amazon was at the center of a highly publicized FCRA violation, and in 2018 they agreed to pay a settlement totaling $1.6 million. The allegations the online retail platform faces were that they violated the FCRA by not giving job applicants the proper disclosures that they would be subjected to background and credit checks. This case showed that the FCRA is instrumental in making sure that your information is protected, and that nobody should be able to access it without your permission.
Pulbix agreed to pay a substantial settlement of nearly $7 million to settle legal action brought against the chain that claimed they repeatedly violated the FCRA by not providing the needed disclosures to job applicants that they would be conducting background checks on them. This was one of the largest settlements against an employer for violating FCRA regulations during the hiring process.
PepsiCo settled a suit in 2012 based on allegations that they ran background checks on their employees or employee applicants, without giving them the proper disclosures first. While only just over $1 million, the case served as a stark reminder that large companies must adhere to the FCRA, even during the hiring process.
First Advantage Background Services, a very large background check provider, agreed to pay a settlement of just over $1 million in a lawsuit that leveled multiple allegations. One is that the company provided inaccurate background check information to potential employers, and failed to properly notify consumers of their rights under the FCRA. This case was important for showing that not only can the parties who order the background checks be held liable, but also the entities who provide that background information.
Home Depot finally settled a class-action suit in 2017 that alleged the big box hardware store violated the FCRA in the same manner as many other potential employers, by not advising those applying for jobs that they would face background or credit checks.
It can take substantial time to work through the usual channels needed to get credit inaccuracies removed from your credit report, and in most cases, staying persistent and following up once or twice will usually get the job done. However, this isn’t the case in all situations, and when you’ve gone through all of the proper avenues to get your credit report cleaned up of errors that aren’t your fault, you may have the option to pursue legal action.
If nothing else, these cases show just how important FCRA compliance is, and what it can cost to violate it.
The FCRA allows consumers to seek compensation for damages that they’ve suffered as a result of repeated, willful, or even slanderous credit reporting. These damages can be economic, or they can be non-economic damages, such as damage to your reputation. If you believe that you may have a legal credit issue for FCRA violations, Fair Credit may be able to help. Reach out today for an evaluation of your case, and find out if you may be entitled to damages.