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.
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Showing posts with label investigative consumer reports. Show all posts
Showing posts with label investigative consumer reports. Show all posts
June 16, 2009
New case involving an investigative consumer report for employment purposes
The United States District Court for the District of Connecticut released an interesting new opinion on May 28, 2009. The case is Deborah Adams v. National Engineering Service Corporation and involves claims arising from a background check that contained errors and cost the plaintiff a new job.
Basically (and I do mean basically) what happened is that National Engineering Service Corporation ("NESC") was contracted by a potential employer of Adams to run a background check on Adams. NESC got a company called "Verifications" (who was also a defendant in the lawsuit) to run the background check. Verifications prepared the investigative consumer report which contained errors, namely several convictions that showed up under someone with the same name and date of birth as the plaintiff but was not the plaintiff. Verifications was provided the report by yet another company that was not a defendant but probably should have been. Due to the erroneous criminal record, Adams was not hired.
NESC first claimed that it was not subject to the FCRA because it claimed it was not a consumer reporting agency since it didn't prepare the report since Verifications did. The Court found that NESC is a consumer reporting agency because it "evaluated" the consumer report when its employee commented in an e-mail to the employer that the background check was "not good at all."
The Court then found that the Plaintiff presented sufficient evidence for her 15 U.S.C. 1681e(b) claim to survive. 1681e(b) requires consumer reporting agencies must follow reasonable procedures to assure maximum possible accuracy of the credit reports they create. Most courts (like this one) have held that whether reasonable procedures were used is almost always a question for the jury and thus not appropriate for summary judgment where there is evidence of an error on the credit report. In Adams, the defendants did not contest that the background check contained errors, so the Court found that the plaintiff's 1681e(b) claims survived.
The only claims of the plaintiff that were dismissed were some state law claims, primarily because the court found no evidence of malice on the part of the defendants (just evidence of stupidity, apparently). Since 15 U.S.C. 1681h(e) provides CRAs with qualified immunity from state law claims unless there is malice, the Court dimissed the state law claims for defamation and negligence. It dismissed the other state law claims on other grounds.
The only beef I have with the Court's ruling is that it did not consider all of 1681h(e). 15 U.S.C. 1681h(e) grants qualified immunity for certain state law claims if there is no malice but only for certain disclosures of consumer reports, i.e. disclosures made pursuant to 1681g, 1681h or 1681m. Disclosures pursuant to these sections only go to the consumer himself. Thus, disclosures made to third parties (i.e. Adams' potential employer) do not get the benefit of qualified immunity. In defense of the Court in this case, there are many other Courts that have also missed this point.
Overall, though, a great and informative decision.
Basically (and I do mean basically) what happened is that National Engineering Service Corporation ("NESC") was contracted by a potential employer of Adams to run a background check on Adams. NESC got a company called "Verifications" (who was also a defendant in the lawsuit) to run the background check. Verifications prepared the investigative consumer report which contained errors, namely several convictions that showed up under someone with the same name and date of birth as the plaintiff but was not the plaintiff. Verifications was provided the report by yet another company that was not a defendant but probably should have been. Due to the erroneous criminal record, Adams was not hired.
NESC first claimed that it was not subject to the FCRA because it claimed it was not a consumer reporting agency since it didn't prepare the report since Verifications did. The Court found that NESC is a consumer reporting agency because it "evaluated" the consumer report when its employee commented in an e-mail to the employer that the background check was "not good at all."
The Court then found that the Plaintiff presented sufficient evidence for her 15 U.S.C. 1681e(b) claim to survive. 1681e(b) requires consumer reporting agencies must follow reasonable procedures to assure maximum possible accuracy of the credit reports they create. Most courts (like this one) have held that whether reasonable procedures were used is almost always a question for the jury and thus not appropriate for summary judgment where there is evidence of an error on the credit report. In Adams, the defendants did not contest that the background check contained errors, so the Court found that the plaintiff's 1681e(b) claims survived.
The only claims of the plaintiff that were dismissed were some state law claims, primarily because the court found no evidence of malice on the part of the defendants (just evidence of stupidity, apparently). Since 15 U.S.C. 1681h(e) provides CRAs with qualified immunity from state law claims unless there is malice, the Court dimissed the state law claims for defamation and negligence. It dismissed the other state law claims on other grounds.
The only beef I have with the Court's ruling is that it did not consider all of 1681h(e). 15 U.S.C. 1681h(e) grants qualified immunity for certain state law claims if there is no malice but only for certain disclosures of consumer reports, i.e. disclosures made pursuant to 1681g, 1681h or 1681m. Disclosures pursuant to these sections only go to the consumer himself. Thus, disclosures made to third parties (i.e. Adams' potential employer) do not get the benefit of qualified immunity. In defense of the Court in this case, there are many other Courts that have also missed this point.
Overall, though, a great and informative decision.
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