Retail theft databases - a different kind of consumer reporting agency

What if you are accused of stealing from your employer at a retail store?  Chances are, your alleged theft may hinder your later chances at landing a job.

When thinking of a consumer reporting agency, most people think of the big three credit bureaus - Experian, Equifax and Trans Union - and the credit histories they spit out about consumers.  But there are other types of consumer reports, such as reports regarding employees who allegedly steal. 

For instance, ChoicePoint, who at one time was part of Equifax, manages a collection of information called "Esteem" which is a workplace theft database.  To populate its database with information, ChoicePoint collects reports from over 75,000 retailers regarding employees who allegedly steal from their employers  Companies looking to hire new employees then buy reports regarding potential hires from ChoicePoint's Esteem database. 

ChoicePoint is not the only one in this line of business.  HireRight has compiled an employee-theft database to which 500 member companies contribute evidence of convictions, signed confessions, video surveillance or eyewitness statements regarding employee theft.

Also, the National Retail Mutual Association has collected more than 500,000 incidents of employee theft in its NRMA Retail Theft Database. NRMA obtains its information from client stores who have obtained a signed confession, a signed restitution agreement, a fully paid civil demand, a criminal conviction or other "documentary evidence."

What these companies don't take into account is that, sometimes, people plead guilty to things they did not do, because a conviction, no matter how wrongful, would impose a much worse sentence than the deal the defendant can get by pleading out.  Many innocent defendants plead guilty to get probation where demanding trial also means risking jail time. 

Just like the databases maintained by big three credit bureaus, the retail theft databases put consumers at risk of gross errors that could cost consumers a job and damage their reputations.  Luckily, the retail theft databases are also subject to the requirements of the Fair Credit Reporting Act.

Consumers suspecting that a company may be reporting incorrect information about them to potential employers should request a copy of any and all information about them in the possession of the retail theft database companies named above.  If an error is found, it should be disputed immediately and repeatedly until it is fixed or it becomes obvious that litigation is necessary to correct.  At that point, consumers should contact a consumer attorney such as myself for assistance.

New FCRA case - Tobler v. Equifax and Auto Club Insurance Agency

District Judge Denise Page Hood issued a new opinion in a new Fair Credit Reporting Act case from the United States District Court for the Eastern District of Michigan, Southern Division. The case is styled Tobler v. Equifax and Auto Club Insurance Agency and was released on May 27, 2009.

This case makes clear yet again that it is foolish for consumers to represent themselves, especially in the complicated field of Fair Credit Reporting Act litigation. The pro se plaintiff (pro se means the plaintiff represented himself) filed a lawsuit against Equifax, ChoicePoint and Auto Club Insurance Agency (a.k.a. AAA). The claims against Equifax and ChoicePoint were for violating the FCRA for failing to correct errors on Tobler's credit report. The Court's opinion, however, focuses on Tobler's claims against Auto Club Insurance Agency, which Tobler claimed overcharged him based upon the erroneous credit reporting of Equifax and/or ChoicePoint.

The problem is that, even if the plaintiff's allegations agaisnt Auto Club Insurance Agency are 100% factually accurate, there still is no valid claim under the FCRA. The only duty of a user of a consumer report in relation to an adverse action is to give the required notice to the consumer who suffered the adverse action. This duty is found in 15 U.S.C. 1681m. Moreover, there is no private cause of action under 1681m because that right was taken away when the FCRA was amended a few years ago. Now, only certain governmental agencies have a right to sue for a violation of 15 U.S.C. 1681m. Consumers no longer have that right.

Thus, the plaintiff's claims against Auto Club Insurance Agency were doomed to fail, even if the plaintiff's last ditch effort to amend his complaint to add a claim under 15 U.S.C. 1681m had been granted. The Court correctly ruled that Tobler's claims against Auto Club Insurance Agency should be dismissed and granted Auto Club's motion to dismiss.