Feb 7, 2024

A class action lawsuit alleging Fair Credit Reporting Act (FCRA) and California law violations has reached a nearly half-a-million-dollar settlement. This lawsuit alleged that a background check provider had furnished records extinguished under California law. This case began when the defendant prepared a consumer report concerning the plaintiff, including criminal background information. 

Claims and Arguments

The defendant’s report claimed that the plaintiff had two misdemeanor convictions. Though true, the plaintiff argued that the court expunged both criminal records. The expungement happened before the defendant prepared the background check report. Due to the defendant providing multiple reports detailing this information, the plaintiff experienced repeated employment rejections.

The lawsuit claims that these reports were factually inaccurate. As such, the background checking company should not have included the expunged criminal record information in their report. The plaintiff claimed that the consumer reporting agency “failed to follow reasonable procedures to assure the maximum possible accuracy of the information it reported” about them.

The class action lawsuit claimed the background check provider violated the FCRA, the California Consumer Credit Reporting Agencies Act, Cal. CiV. Code § 1785 et seq. (“CCRAA”), and the Investigative Consumer Reporting Agency Act, Cal CiV Code § 1786 et seq. (“ICRAA”). These violations rendered many credit reports inaccurate, all of which the agency sold to third parties. These actions led to the claim of failing to thoroughly search publicly available information, such as expungement records, before preparing and selling background checks. 

The Court’s Decision

A federal court has provided preliminary approval for an FCRA settlement between both parties. This settlement would benefit all impacted individuals based on the following:

‘From the period of February 20, 2020, to February 28, 2023, all natural persons residing in the United States and its Territories: (a) about whom Defendant furnished a consumer report for employment purposes; (b)whose report contained one or more items of criminal record information relating to a record that had been (i) expunged, (ii) sealed, (iii) dismissed pursuant to California Penal Code § 1203.4, or (iv) otherwise extinguished from the public record; (c) who disputed information on their report; (d) where an amended report was issued; and (e) where the amendment of the report was related to the reporting of a criminal record(s) that, at some point before the resolution of the dispute, Defendant determined to be expunged, sealed, otherwise extinguished from the public record, or dismissed pursuant to California Penal Code § 1203.4.”

If approved, this settlement will require the background check provider to pay $487,000 to a settlement fund. This fund would pay for all the expenses associated with the litigation for the plaintiff, the class counsel, and the distribution among the class members.


Information provided here is for educational and informational purposes only and should not constitute as legal advice. We recommend you contact your own legal counsel for any questions regarding your specific practices and compliance with applicable laws.